The Employment Market and Wage Inflation

Bar chart illustrating the decline in lower vacancy rates across various market types since the pandemic, with industrial markets showing the highest vacancy levels, followed by retail, apartment, and office markets.

What Emerging Workforce Trends Mean for Investors?

Labor Market Still Showing Signs of Strength

  • The unemployment rate in April fell back to 3.4 percent, while the labor shortage fell to 3.7 million

  • A decrease in immigration and of older workers in the labor force are helping sustain the shortage

Diminishing Wage Pressure To Aid Inflation Fight

  • Despite the shortage of workers, wage growth has fallen off recent highs to 4.3% annually

  • Construction wages are 15.3% higher than before the pandemic, creating additional delays in construction

What This Means For Investors

  • As wage growth is a major concern of the Fed, a slowdown may signal that it is time to pause rate hikes

  • Certainty in the interest rate climate would help investors, developers and lenders achieve stable financing outcomes on projects and plans

*Through April; job openings through March
Sources: Marcus & Millichap Research Services, BLS

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