Jobs report brings good news for real estate

Gains in leisure and hospitality; remote work declines

(iStock/Illustration by Steven Dilakian for The Real Deal)
(iStock/Illustration by Steven Dilakian for The Real Deal)

Restaurants, bars and hotels hired 112,000 workers in March, a show of modest strength in the sector as national employment climbed to within 1 percent of pre-pandemic levels.

The economy added 431,000 jobs last month with notable gains in leisure and hospitality, construction, building services and rental and leasing, according to figures released by the Department of Labor on Friday.

“March was another strong month for the job market,” Mike Fratantoni, chief economist for the Mortgage Bankers Association, said in a statement. “Job gains were well above what can be sustained for the longer term.”

Monthly job growth averaged 562,000 in the first quarter of the year following upward revisions for January and February, matching monthly gains made during 2021.

Pandemic-related job losses in leisure and hospitality have left a hole in the U.S. economy. The sector accounts for 1.5 million of the 1.6 million positions lost since February 2020. The sector’s job gains in March were about one-quarter less than the gains reported in January and February.

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Office landlords have reason to cheer the new data, as the number of people who reported working from home fell to 10 percent from 13 percent in February. “As the federal government and others return to work in April, this number should drop sharply,” Fratantoni predicted. “This is good news for commercial real estate lenders and investors.”

Retailers hired 49,000 people in March and now employ 278,000 more people than in February 2020. The construction industry returned to its pre-pandemic level after hiring 19,000 workers, and some 22,000 were hired to provide services to buildings.

Real estate rental and leasing added 14,000 jobs in March, while hiring in warehousing, which was already above pre-pandemic levels, was flat.