Arizona’s job market hit a snag in August, with 2,500 nonfarm jobs lost, placing us 41st in the nation. Though the unemployment rate held steady at 3.4%, below the national average of 4.2%, the rising jobless claims are worth noting for those in commercial real estate.
— Job Growth Slows: Arizona’s year-over-year job growth dropped to 2.1%. Slower job growth means less demand for office space, with businesses holding off on expansions.
— Wages Rise, But Not Enough: Wages grew by 5.1% year-over-year, with private sector workers now earning $33.51 per hour. However, job growth isn’t keeping pace, limiting demand for new leases.
— Jobless Claims Up: Jobless claims jumped 13.5% over last year. When businesses cut back, the commercial real estate market feels the pressure.
We had a nice couple of years but now we are slowing down a bit. This softening in the job market, coupled with 20% office vacancy makes for a tough office market for the next few years.
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