Intelligent Investment

Economic Watch: Strong October Job Growth Beats Expectations

November 5, 2021 3 Minute Read

Executive Summary

  • The U.S. added 531,000 jobs in October, well exceeding expectations of 450,000.
  • Leisure & hospitality employment grew the most of any sector in October with 164,000 new jobs.
  • The labor participation rate was unchanged at a relatively low 61.6%, while the unemployment rate decreased by 20 basis points (bps) to 4.6%. Average hourly wages increased by 0.4% in October and 4.9% year-over-year.
  • Job growth in August and September was revised up by 235,000.
  • Investor reaction to the October jobs report was positive across equity indices. The 10-year Treasury yield was down slightly and the dollar strengthened.

Impacts on Commercial Real Estate


Office-using jobs increased by 121,000 in October. Professional & business services gained 100,000 and financial activities added 21,000. These gains should help boost office demand, along with the improved public health outlook from a decrease in COVID infections.


The warehousing & storage sector gained 20,200 jobs in October and manufacturing added 60,000. In addition, 7,900 trucking jobs were added. Strong growth across these job categories could bode well for the potential easing of supply chain disruptions.


Traditional retail gained 35,300 jobs in October, while food services & drinking places added 119,400. Physical retail could surprise on the upside this holiday season amid lower COVID infections and broad-based job growth.


The construction sector gained 44,000 jobs in October across both residential and commercial categories. While the sector likely will continue to face headwinds from disrupted supply chains and labor shortages, the outlook for residential construction is buoyed by an improving economy and growth in household formation.

Health Care

Health care gained 37,200 jobs in October. Ambulatory health care (outpatient services) added 32,300, while hospitals gained 1,100 and nursing & residential care added 3,800. Though impacts from the pandemic may persist, demographic trends underpin a favorable outlook for health-care real estate demand.


Accommodation services gained 23,200 jobs in October. Although CBRE expects an uneven recovery for the hotel industry, with leisure travel remaining stronger than business travel over the near term, the outlook is improving due to lessening COVID infections and the resumption of inbound international travel.


Strong job growth and higher wages will support household formation and the ability to pay rent. As economic activity recovers in large cities, urban multifamily markets should see noticeable improvement.

The Bottom Line

October’s strong jobs report reflected gains across all sectors except for government, which lost 73,000. Broad-based job growth bolsters the case for the Fed’s path toward monetary policy normalization via a reduction in asset purchases.

CBRE’s outlook for the U.S. economy and real estate market remains favorable. COVID’s waning impact should encourage additional workforce participation and employment growth, aiding real estate’s recovery in 2022.