Two Forces Driving the CRE Outlook

NEW LABOR MARKET DATA STRENGTHENS LIKELIHOOD OF SOFT LANDING​

Labor Market Growing, But At Subdued Pace​

• The U.S. is on pace to add more than 2 million jobs in 2023, a slower rate than last year​

• Slowed employment growth will help keep wage growth in-line, aiding the Fed’s inflation fight​

CRE Outlook Boosted If Soft Landing Achieved​

• CRE absorption is strong during periods with this year’s level of job creation​

• A soft landing would diminish upward pressure on interest rates, while raising consumer and business confidence, tailwinds for CRE demand and investment​

Federal Reserve Actions To Drive Economic Outlook​

• The question is, will wage growth and inflation fall quick enough for interest rates to stop rising in 2023​

• Wall Street does not expect a rate hike at the next Fed meeting, but is split on the outlook for EOY 2023​

*Sources: Marcus & Millichap Research Services, BLS​

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