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Bay Area Research Rant: Asian Econ Flu = U.S. Hiring Sniffles


By Garrick Brown, Vice President, Research – West Region

I’m going to keep this super brief this week. Doctor TabletThe annual Urban Land Institute Fall Meeting started today in San Francisco and yours truly has a slew of speaking engagements Wednesday that I need to finish preparing for. But I wanted to point out the logic behind the stories of the week I chose…

Interesting how the New York Times called 142,000 new jobs a “grim” report. Now in their defense they are just quoting a bunch of analysts out there—mostly hysterical Wall Street types—who used words like “dreadful” and “body blow…” Really?! Am I the only guy that remembers 30 months ago that same report would have been referred to as “good, but not great.” I’m serious here. I remember those headlines probably better than most of you because of the nature of what I do here. I dig through headlines all day and have for the past five years. Now I am not going to say those numbers aren’t disappointing considering that we were all hoping for the return of a 300,000 new job month… or at least to stay in the solid 200,000 range as we have for most of this year. But “Grim?” Come on, we lived through grim. Grim was -800,000 jobs in a month back in early 2009. This isn’t grim. This is just garden variety “meh.” Or as a pal of mine in Chicago would put it, “Dat’s a whole lot of whoop-dee-freakin-doo, Brown.”

But these so-so numbers are pretty easy to understand… even though consumer confidence actually gained in August, business confidence has been rattled by all of the volatility on Wall Street. In other words, at least in terms of employment growth, it appears that the flu in Asia turned into a minor cold here. What has yet to be seen is whether this is a blip or something more. There are more positive signs regarding the US economy than negative ones… but Wall Street is where phantoms can become real and where the herd is all too easily spooked. Here’s the deal though… job openings have yet to falter.

Watch the JOLTS report for a preview of next month’s job creation numbers. If job openings climb or stay the same in that report then I don’t see these mediocre (and that is exactly what they are) numbers as being much more than a blip. That is, of course, assuming Wall Street doesn’t have another freakout in October. Remember, consumer spending is actually up and we are heading into the busiest time of the year for retailers so that is another good sign on the demand side. That doesn’t necessarily mean that the October numbers will top the 200k mark (I’m guessing a couple of slow months in a row), but we will likely spring back by November/December.

But if we see significant declines in the number of active job openings in the next JOLT report, and/or if we see an escalation of Wall Street volatility, then we may be looking at the beginning of a downshift in hiring that could extend into next year and that, if it lasts long enough, may have much broader economic consequences.

This post is commentary from the latest weekly edition of our Bay Area Research Rant, which you can subscribe to for free by e-mailing garrick.brown@cushwake.com.

garrick-brownGarrick joined Cushman & Wakefield (formerly DTZ / Cassidy Turley) in October 2010. He serves as Vice President of Retail Research for the Americas. He speaks frequently at industry events and has been a keynote speaker at symposiums, conferences and market forecasting events for groups like the Appraisal Institute, Urban Land Institute, CREW, ICSC and PRSM. He is also a member of Lambda Alpha International, an invitation-only land use society for those who are involved in the ownership, management, regulation and conservation of land, but also those who are involved in its development, redevelopment and preservation.

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