In May, the United States added 223,000 jobs and the unemployment rate declined to 3.8 percent, according to the U.S. Bureau of Labor Statistics. The increase in nonfarm payroll employment in May was higher than in April (which was revised down to 159,000) and March (which was revised up to 155,000).
The job gains reflect an economy that can support a variety of property types. The strongest employment categories were retail trade, which added 31,000 jobs; healthcare, which added 29,000 jobs; and construction, which added 25,000 jobs. In addition, professional and technical services increased by 23,000 jobs, and transportation and warehousing added 19,000 jobs.
The positive increase in employment, coupled with moderate inflation, indicate an economic environment that will continue to support commercial real estate investment. Earlier this week, the Bureau of Economic Analysis released its second estimate of first quarter GDP growth, showing the U.S. economy grew by 2.2 percent in the first quarter. Also, U.S. 10-year Treasury yields declined by 14 basis points during May. Such tightening, driven by a flight-to-safety in the wake of euro zone jitters, may also be supportive of commercial real estate. Investors, however, will need to watch developments in international trade, as a trade war may have a dampening effect on economic performance.
