Hiring rebounded in April from the surprise setback in March, further tightening the labor market...

1. May 5, 2017
April Jobs Report: Rolling Again
Hiring rebounded in April from the surprise
setback in March, further tightening the labor
market according to today’s jobs report issued
by the Bureau of Labor Statistics. Here are the
details:
• Employers added 211,000 net new
payroll jobs in April, raising the year-
to-date monthly average to 185,000,
consistent with the 2016 average of
187,000. The report beat the 190,000
forecasted in Bloomberg’s survey of
economists. Revisions to February
and March subtracted a modest 6,000
jobs from the previously reported
totals.
• Leisure and hospitality led all sectors
with a robust 55,000 new jobs, of
which 26,200 were in restaurants and
bars—a big support for leasing activity
in shopping centers and storefront
retail space. Two key sources of
demand for office space expanded
last month: Professional and business
services added 39,000, while financial
firms gained 19,000. Health care
employers added 19,500, about
10,000 below the 12-month average,
which suggests some caution as
Congress wrestles with the future
structure of health care delivery in the
U.S. The continued migration of retail
sales online kept hiring to a minimum

2. last month, as retailers added a slim
6,300 jobs.
• Goods-producing sectors were mixed. Energy producers ramped up, adding 10,000 jobs in the mining
and logging sector. Manufacturers added 6,000, while construction gained 5,000, well below recent
averages, as the erratic spring weather affected the pace of hiring.
• Wages increased by a solid 0.3% in April, yet the 12-month increase was a middling 2.5%, down from
2.9% in December. Wage growth has languished below 3.0% since April 2009.
• The unemployment rate dropped a notch to 4.4%, its lowest level since May 2007, while the U-6 rate,
which includes labor market slack not picked up in the unemployment rate, fell three-tenths of a point to
8.6%. The rapid decline in the U-6 rate indicates that strong demand for labor is pulling the long-term
unemployed from the sidelines—a process of healing the residual damage left from the 2007 – 2009
recession.
• The labor force participation rate, another closely watched measure of slack in the labor market, fell a
notch to 62.9%. The sheer force of demographics is keeping the rate low, as the giant baby boom
generation ages out of the labor force.
Three key takeaways from the April employment report:
• The consistent pace of job creation is great news for the economy, as it continues to reverse the
damage wrought by the last recession, and great news for commercial real estate, because it will
support demand across all property types.
• The report keeps the Federal Reserve on track to follow through with two more quarter-point rate hikes
this year, likely in June and September. The Fed is gradually shedding the emergency measures taken
to support growth in the past few years.
• Commercial real estate markets mirror the steady growth evident in the economy. Property sales
volumes and absorption of space, while down modestly from recent peaks, are likely to continue at a
steady pace as long as the economy continues to expand—potentially for another 18 to 24 months, as a
lack of excesses such as inflation and widespread overbuilding keeps risks in balance.