Intelligent Investment

Economic Watch: January Job Growth Triples Expectations

February 4, 2022 3 Minute Read

Executive Summary

  • The U.S. added 467,000 jobs in January, triple the consensus expectations of 150,000. This higher-than-expected improvement, coupled with sharply higher revised job growth in November and December, shows that despite headwinds from the omicron variant, the U.S. economy has strong momentum.
  • Leisure & hospitality gained 151,000 jobs, the most of any sector.
  • The labor participation rate increased by 30 basis points to 62.2%. Workers returning to the labor force caused the unemployment rate to tick up by 10 basis points to 4.0%. Wage growth was very strong with a 5.7% year-over-year increase.
  • Significant upward revisions were made to November and December job growth. December was revised to 510,000 from 199,000 and November went to 647,000 from 249,000.
  • CBRE maintains a positive outlook for the economy and commercial real estate in 2022. With higher-than-expected inflation, the Fed has signaled a tightening of monetary policy in 2022 by ending its asset purchases (quantitative easing) and raising interest rates, both likely beginning next month, along with decreasing the size of its balance sheet later in the year.

Impacts on Commercial Real Estate


Office-using jobs increased by 95,000 in January. Professional & business services gained 86,000 and financial activities added 9,000. Although the omicron variant is clearly disrupting work routines and the timing of workers returning to the office, this job growth bodes well for demand later in the year.


The warehousing & storage sector gained 13,400 jobs in January and manufacturing added 13,000. Healthy consumer balance sheets, improved supply chain operations and e-commerce growth are positive portents of continued robust industrial & logistics real estate demand.


Traditional retail gained 61,400 jobs in January, while food services & drinking places added 108,200. This strong growth was recorded despite a surge in COVID infections from the omicron variant. A strong labor market and healthy consumer balance sheets underpin positive expectations for retail in 2022.


The construction sector lost 5,000 jobs in January, with heavy & civil engineering construction down 9,500. Residential building jobs grew by 3,600, while nonresidential added 400. Although disrupted supply chains and labor shortages will remain problematic over the near term, strong economic growth and relatively low interest rates underpin a positive outlook for the construction industry.

Health Care

Health care gained 18,000 jobs in January. Ambulatory health care (outpatient services) added 14,700, while hospitals gained 3,400 and nursing & residential care lost 100. Long-term trends continue to support demand for health-care real estate.


Accommodation services gained 22,600 jobs in January; however, continued COVID uncertainty could slow the sector’s recovery in the months ahead. Although business and international travel will be most impacted, recovery is expected to resume once the omicron wave wanes.


Continued strong job and wage growth will support household formation. As economic activity recovers in large cities and COVID infections subside, urban multifamily markets should see additional improvement. Expectations of strong demand, amid a shortage of new housing, will support the sector.

The Bottom Line

The U.S. economy remained resilient in the face of omicron, with January job growth well above expectations and sizeable upward revisions in the November and December job numbers. This will reinforce the Fed’s plan to tighten monetary policy by ending quantitative easing and raising interest rates several times this year, both likely beginning in March, along with reducing its balance sheet later in the year.

Financial market volatility likely will continue for the next several months, as investors adjust to a new interest rate environment. This volatility should diminish somewhat as inflationary pressures ease in the second half of the year. Even with higher interest rates, the U.S. economy will continue to expand thanks to consumer strength and a greater ability to mitigate the impacts of COVID. This, in turn, will support real estate demand as the year progresses.