Trump 2.0: The First 100 Days | United States

Early Cracks in the Labor Markets

Impact on CRE

• Other than interest rates (arguably), no single factor is more important for real estate than jobs. • Labor markets had been cooling in 2024 across a number of metrics, and softer survey data is beginning to show more weakness forming in the labor markets. • The Challenger Report shows that layoffs are beginning to spike and average weekly hours have been declining for the last year and recently dipped to low levels. Firms tend to cut hours before laying off workers, so this measure can be a leading indicator. • Another important and timely indicator (not shown) is weekly initial claims for unemployment insurance. • The labor markets are generally holding up so far, but these leading indicators will be critical to watch going forward in gauging where demand for space goes from here.

Layoffs Announcements (Ths.)

Average Weekly Hours

300

35.0

34.9

250

34.8

34.7

200

34.6

150

34.5

34.4

100

34.3

34.2

50

34.1

0

34.0

Jul-21

Apr-20

Oct-22

Jan-21

Jan-22

Jan-23

Jan-24

Jan-25

Jan-19

Jun-19

Jan-24

Jun-24

Feb-21

Mar-23

Nov-19

Dec-21

Nov-24

Sep-21

Sep-22

Sep-23

Sep-24

Sep-20

Aug-23

May-21

May-22

May-23

May-24

May-22

Source: Challenger, Gray & Christmas, Inc.: Job Cut Report; U.S. Department of Labor

CONTENTS

CONTENTS

Cushman & Wakefield

11