US Employment Up 1.2 Million Jobs From Pre-Pandemic Levels US EMPLOYMENT GROWTH SINCE THE PANDEMIC

As of December 2022, total employment in the US had not only rebounded from pre-pandemic levels, but—over the course of 2022— surpassed them. This is even though roughly four million Americans dropped out of the workforce in 2020 and have yet to return (nearly three million alone opted for early retirement and are not likely to return to the workforce). Hence, the record low unemployment, and the likelihood of protracted labor shortages in the future as the trend of baby boomers retiring continues to escalate.

The Labor Force Participation Rate stood at 63.4% in February 2020. It fell to just 60.2% by April of that year. Since that time, it has improved considerably to the current rate of 62.3% thanks to a hot labor market and rising wages.

Yet, the economy has added 1.221 million new positions since 2020. Not all categories have fully rebounded. The Leisure & Hospitality sector (which includes hotels and restaurants) remains down 864,000 jobs. Government shed 394,000 positions while Other Services lost 160,000 jobs.

The biggest winner has been Professional & Business Services (+957,000). In fact, the three major categories that account for most office use (Financial Activities, IT and Professional & Business Services) together account for more 1.226 million total jobs—more than the market as a whole.

Historically, office-using employment growth was a reliable indicator for future office real estate demand, with the average tenant typically housing anywhere from four to six workers per 1,000 square feet (SF) of space. The explosion of work-from-home (WFH) and hybrid work arrangements since the pandemic has, at least temporarily, rendered projections based on past norms nearly impossible. However, this strong level of growth is sure to be a mitigating factor in the wave of office space consolidation that is anticipated in 2023.