Intelligent Investment

Economic Watch: Strong Job Growth Continues in March

April 1, 2022 3 Minute Read

Executive Summary

  • The U.S. added 431,000 jobs in March, below expectations of 490,000.
  • Leisure & hospitality gained 112,000 jobs, the most of any sector.
  • The labor force participation rate increased slightly to 62.4% and the unemployment rate fell to 3.6%, near the pre-pandemic level of 3.5%.
  • Wages were up 5.6% on a year-over-year basis for all employees, including a 6.7% jump for production and nonsupervisory employees.
  • Job growth in January and February was revised up by 95,000.
  • CBRE expects the Fed will increase the federal funds rate by 50 basis points (bps) in May, with at least four more increases later this year.

Impacts on Commercial Real Estate


Office-using jobs increased by 118,000 in March. Professional & business services gained 102,000 and financial activities added 16,000. Improved public health conditions were also a positive sign for the office sector, evidenced by a drop in the share of employees who telework to 10% in March from 13% in February.


The warehousing & storage sector gained 4,300 jobs in March and manufacturing added 38,000. CBRE expects industrial & logistics demand will remain strong as companies increase their inventories and focus on making supply chains more resilient to mitigate disruptions.


Traditional retail gained 49,000 jobs in March, while food services & drinking places added 61,300. This reflects the broad strength of the economy supported by strong consumer balance sheets driving consumption. CBRE maintains a positive outlook for the retail sector as COVID risks decrease, although high inflation is expected to weigh more heavily on consumers later this year.


The construction sector added 19,000 jobs in March. Nonresidential building construction added 2,600 jobs, which was offset by 2,600 lost in residential building construction. This may be a sign that increased costs of building materials, high wages and rising interest rates are beginning to inhibit construction.

Health Care

Health care gained 8,300 jobs in March. Ambulatory health care (outpatient services) added 7,200, while hospitals gained 5,100 and nursing & residential care lost 4,000. The sector is expected to benefit from long-term tailwinds.


Accommodation services added 25,000 jobs in March. CBRE expects continued strength in the hotel sector as leisure travel remains strong, international travel accelerates and business travel resumes. This also underscores a broader shift in spending, with consumers turning toward experiences and services as pandemic-related concerns fade.


Strong job growth that supports household formation, combined with homeownership affordability challenges, will maintain demand for multifamily real estate. Continued affordability challenges, which will be exacerbated by rapidly rising mortgage rates, likely will bolster multifamily fundamentals as first-time homebuyers struggle with current market dynamics. CBRE also expects that urban multifamily assets will especially benefit from a normalization in work patterns and other activities amid easing COVID restrictions.

The Bottom Line

March job growth was solid and likely will be revised upward over the next two months. The separate household survey, which showed even stronger job growth in March, is a reliable predictor of future revisions to monthly job totals. The strength of the labor market is of increasing concern to the Fed, which is looking to tamp down wage inflation. CBRE expects the federal funds rate will be increased at least five more times this year, beginning with a 50-bp increase in May.

The price of oil and other commodities likely will remain elevated in the near term due to the war in Ukraine. However, the magnitude of the price increases may be somewhat tempered in the near term by reduced demand from China due to COVID lockdowns. Still, elevated prices, along with rising interest rates, will weigh on consumers and businesses through the end of 2022. We expect GDP growth of approximately 3% this year. This will fuel occupier demand and underpin continued improvement in property market fundamentals. However, continued higher interest rates and inflation, combined with ongoing supply chain challenges, pose a risk to our economic outlook.