October employment growth was weaker than it had been in previous months with new job gains totaling 150,000. August and September gains were revised down, painting a slightly more bleak picture of the employment market than we have seen in recent months. As a result, the 10-year treasury retreated quickly, although it remains high at 4.6%. The October jobs report is not a red flag for the economy in my opinion, as volatility in the jobs numbers has been common since the recovery from COVID-19 began. Unemployment is still historically low at 3.9% and job openings far outpace the number of people looking for jobs. In fact, the rising unemployment figures may indicate a positive trend as more people re-enter the labor force. Job growth is slowing overall, but we continue to add new jobs in the 150,000-200,000 range. Given how tight the labor market is, I view the employment market as a continued point of strength for the macro-economy.
Apartment performance metrics were mostly flat last week, softening in some areas including net effective rent and occupancy. The tenor of many conversations at NMHC’s Optech conference last week was muted, as many apartment owners and operators brace for weakness through the next six months. Our data is indicating a similar trend and given the vast number of new units coming online in the next two years, apartment performance will likely suffer as demand fails to keep up with supply at the national level. There are currently 881,000 units under construction nationwide.
Key Takeaways – Data as of 11/06/2023
Traffic and Leases:
Occupancy and ATR:
Net Effective Rent:
Revenue Per Available Unit:
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