December 16, 2008

Length of Post-War Recessions & Jobless Recoveries

A jobless recovery is the period following a recession when the nation’s gross domestic product is expanding but the labor market is stagnant or shrinking. The term was first used to describe the period following the 1990-91 recession. In earlier cycles, the labor market began to grow again simultaneously with or shortly after the end of the recession. A logical way to measure a jobless recovery is to use nonfarm payroll employment at the end of the recession as a benchmark. The period between the end of the recession and the month when employment finally rises above that level could be designated a jobless recovery. Using that definition, the jobless recovery lasted 14 months after the 1990-91 recession and 29 months after the 2001 recession. Several causes of jobless recoveries have been advanced: productivity increases, off-shoring of jobs and a weaker manufacturing sector. Most likely the current recession, already in its 12th month, will be followed by a jobless recovery that is likely to dampen tenant demand for commercial real estate over the next two years.

Source: U.S. Bureau of Labor Statistics, Grubb & Ellis

December 8, 2008

Monthly Job Change

The labor market shed a seasonally adjusted 533,000 net payroll jobs in November, the highest monthly loss since December, 1974 and well above the consensus among economists for a loss of 300,000 to 350,000. Additionally, September and October losses were revised lower by a combined 199,000. The labor market began shrinking in January, but the losses through August were shallow compared with prior recessions, totaling 655,000. Since September, losses have accelerated sharply, totaling 1.2 million and pushing year-to-date losses to 1.9 million. Entering its 12th month, the recession appears to be growing in intensity even though it is already longer than the prior two recessions, both of which lasted eight months. Job growth is the most important leading indicator of office space absorption, and it supports leasing activity for apartments, shopping centers and industrial properties. Expect job losses to extend into the second half of 2009, meaning that tenant demand for commercial real estate, which lags the labor market, may not firm up until 2010.

Source: U.S. Bureau of Labor Statistics, Grubb & Ellis

December 1, 2008

Happy Birthday Doug

Home Sales
In Millions

November 24, 2008

Cost of Thanksgiving Dinner Ingredients for 10