Recent labor data from the Bureau of Labor Statistics show that total non-farm payrolls grew by 178,000 jobs in March, while the unemployment rate held at 4.3%. Across the first quarter of 2026, net hiring reached 205,000 positions, underscoring continued, if modest, job expansion.
According to a recent Marcus & Millichap brief, much of this growth was concentrated in a narrow band of industries, notably health care, dining, construction and courier services. Outside those categories, job additions totaled about 34,000, and some white-collar segments, along with the federal government, experienced net job losses.
The brief also noted that the currently low unemployment rate, which has persisted for 22 months, is being supported more by a shrinking labor force than by robust hiring. A key driver of that trend is lower international net migration, which has reduced the pool of available workers and complicated interpretation of headline employment strength.
For office-using employment, the picture is nuanced. In March, jobs in information and financial activities declined by 18,000, and professional and business services firms added only 2,000 workers. Yet, taken over a longer horizon, employment in office-oriented industries has grown by 4% since 2019. That expansion, together with office absorption, would typically support greater space demand, but the Marcus & Millichap analysis emphasized that workplace strategies remain the primary determinant of utilization.
The shift toward hybrid and structured in-office schedules continues to dictate how much space employers actually use, even as headcounts in office-using sectors edge higher. As a result, labor market growth alone is not translating into a proportional increase in office occupancy, keeping attention focused on how corporate policies evolve rather than on job totals by themselves.
Industrial and manufacturing trends present a different dynamic. Manufacturing employment has fallen by more than 300,000 jobs since January 2023, despite a gain of 15,000 positions in March. Federal initiatives have aimed to bolster domestic manufacturing, but the brief noted that bringing new facilities online remains a slow and capital-intensive undertaking, limiting the pace at which policy support converts into sustained employment.
Tariffs and broader geopolitical uncertainties have further clouded the manufacturing outlook. Even so, development activity is advancing. Marcus & Millichap reported that new manufacturing space under construction has been growing since 2021, with more than 78 million square feet underway as of April. That pipeline underscores a disconnect between near-term employment softness and longer-term commitments to industrial capacity, with implications for how both office and industrial real estate demand will track labor trends over time.
