At 390K, May Jobs Numbers Come in Higher Than Expected

The official employment numbers for May showed an additional created 390,000 jobs, according to the Bureau of Labor Statistics. That’s 19% higher than the 328,000 expected by economists the Wall Street Journal had polled in advance. Unemployment stayed at 3.6% for the third month in a row, a figure that Jeffrey Roach, chief economist for LPL Financial, called “stubbornly low” in an emailed statement.

Areas of notable job gains, which could be positive news for some parts of commercial real estate, were in leisure and hospitality, professional and business services, and transportation and warehousing.

Leisure and hospitality employment growth, up by 84,000 over April, was mostly explained by job increases in food services and drinking places (46,000) and accommodation (21,000), which would affect restaurant and bar trade as well as hotels. However, this is still a sector in recovery. Leisure and hospitality employment continues to be off by 1.3 million, or 7.9 percent, from February 2020.

Professional and business services saw 75,000 more jobs in May. The biggest gains were in accounting and bookkeeping services (16,000), computer systems design and related services (13,000), and scientific research and development services (6,000). Currently the sector has 821,000 more jobs than in February 2020, showing continued expansion beyond pre-pandemic levels.

That could mean more demand for office space. Another potential impact on office use is a reduction in people working from home, from 7.7% of employed people in April to 7.4% in May, according to BLS.

The logistics sector, which drives much of the demand for new industrial space, added 47,000 jobs, with warehousing and storage (18,000), truck transportation (13,000) and air transportation (6,000) leading.

Retail, which is still 159,000 jobs stronger than in February 2020, fell by 61,000 in May in general merchandise (-33,000), clothing and clothing accessories (-9,000), food and beverage (-8,000), building material and garden supply (-7,000), and health and personal care (-5,000).

Planning for the growth areas, however, will continue to be a challenge. There were 36,000 more jobs, with April having seen no additions. That was led by speciality trade contractors (17,000) and heavy and civil engineering construction (11,000). The sector has 40,000 more jobs than in February 2020, so above pre-pandemic levels, but that is still too little.

“Construction is one of the tightest sectors in this economy right now,” Roach noted. “We know from other survey data that 69 percent of construction firms reported few or no qualified applicants.”