While the unemployment rate fell 20 basis points to 8.3% in January—the lowest level in three years—there is still persistent slack in the labor market. The under-employment rate, which includes individuals actively seeking work and part-time workers searching for full-time positions, declined only 10 basis points to 15.1% in January, and this rate has remained above 10% since mid-2008. Also, 1.2 million discouraged workers were counted last month, a gain of 114,000 from December.

The report says 42,000 full-time office-using positions were added last month, bringing the total number of office jobs added over the past year to 415,000. New, expanded office space needs are expected to continue throughout the year and generate nearly 47 million square feet of net absorption during the year, reducing nationwide vacancy to 16.6%. Expanding professional and business-service payrolls offset the loss of 18,000 financial-activities and information-sector positions, yielding a net gain of 32,000 full-time office-using jobs, and more than 184,000 full-time office-using jobs were added over the past six months, contributing to a 10-basis-point drop in national office vacancy to 17.3% in the fourth quarter of 2011. The office vacancy rate is expected to drop an additional 70 basis points by the end of the year down to 16.6%.

In the multifamily sector, more than 170,000 apartment units were absorbed in 2011, in part due to the 1.8 million new jobs created last year, the report continues. As a result, multifamily vacancy rates fell 140 basis points to 5.2%, and this trend is expected to continue at a slower pace, with a decline of an additional 40 basis points to 4.8% expected by year-end. This prolonged strong demand, together with a limited development pipeline, is predicted to empower multifamily owners to generate 5.7% effective rent growth this year.

In addition, nearly 41,000 positions were added at bars and restaurants in February, raising the number of jobs in this sector created over the past year to 305,000. A portion of the increase is credited to new restaurant openings and the addition of breakfast service at many national chains, but many establishments have also added staff to handle heavier customer volume. Also, since bars and restaurants generate traffic at shopping centers, a 30-basis-point decline in national retail vacancy last year is likely due to these establishment openings, and retail vacancy is expected to fall another 50 basis points this year to 9.2%. The report shows an increase in retail spending, fueled by new-store openings and a drastically reduced rate of closures, which generated a 30-basis-point decline in national retail vacancy to 9.7% last year. In the year ahead, single-tenant space is expected to account for a sizable portion of completions, while retailers expand cautiously, leading to a decline in vacancy of 50 basis points to 9.2%.

Industrial properties are benefitting from strength in the manufacturing sector and stronger consumer spending. Trade, capacity utilization and the prospect of inventory rebuilding promises to stimulate warehouse demand, but the threat of a Eurozone recession heightens the risk for weaker trade volumes, which would temper demand and slow expansion in this sector. If economic conditions to continue to trend positively, the national vacancy rate for industrial properties is forecasted to improve by 70 basis points on a year-over-year basis to 12.1%.

According to a recent CB Richard Ellis report, real GDP growth in the US surpassed even the most optimistic projections, averaging 3% during the fourth quarter of 2011, and recent economic news supports a continued upbeat US outlook. The country’s economy is expected to grow by an upwardly revised 2.1% this year and 2.3% in 2013, with growth accelerating considerably in 2014.