1. CUSHMAN & WAKEFIELD
ECONOMIC UPDATE
FEBRUARY 3, 2012
US January Employment Report
A Positive Start to the Year
The US Labor Department reported this morning that the economy added 243,000 payroll jobs in January, the
largest increase in employment since last April. In the private sector payrolls increased by 257,000, bringing total
private sector employment growth over the last six months to 1.06 million persons. The unemployment rate
declined to 8.3% from 8.5% in December. As recently as last August the unemployment rate was 9.1%.
The strongest growth was in the professional business services sector, where employment increased 70,000 jobs.
Large increases were also reported in the manufacturing sector (+50,000 jobs), leisure and hospitality (+44,000)
and education and health (+36,000). The government sector continues to shed jobs as states and particularly
localities are forced to retrench under budget pressures. Office‐using employment (made up of the financial,
professional services and information sectors) increased 52,000 jobs, the fifth month in a row that these sectors
have added more than 40,000 jobs. The last time that happened was from November 2005 to March 2006.
The decline in the unemployment rate is particularly encouraging. This data is obtained from the separate survey
households (as opposed to the business survey that provides the payroll employment data) and that survey
showed the number of people unemployed fell by 339,000 in January and has plunged by more than 1.1 million
in the last four months. The labor force continues to grow, so people are entering the labor force and finding
jobs.
The US economy is slowly regaining its footing after the interruption that started last spring. The employment
growth of the last two months coupled with indicators of rising business and consumer spending (auto sales in
January were the highest since mid‐2008) are very positive. It’s still early and there are a number of important
challenges facing the US economy including the resolution of European sovereign debt issues, the US budget
deficit debate and the 2012 elections. But with corporate profits at record levels and household balance sheets in
much better shape, the fundamentals are improving.
For the real estate industry there is nothing more important than employment. More jobs represent more
demand for space. So a return to healthy job growth is the most positive sign in the last six months. Rising
spending will also spur higher demand for manufacturing, warehouse and other industrial spaces. And, of course,
higher consumer spending will help the retail sector.
We are encouraged by this report, however, as the chart below shows, the economy turned in a similar
performance a year ago only to falter. We have been cautiously optimistic on 2012 and this report reinforces that
outlook.
Private Sector Employment Change
(Change From Previous Month, Thousands of Persons)
300
250
264
261
257
257
220
216
200
196
193
178
175
150
141
140
139
134
128
119
115
100
108
102
92
92
84
50
52
0
-27
-40
-50
Source: U.S. Department of Labor, Bureau of Labor Statistics,