The latest U.S. employment data underscore how headline job numbers can mask important shifts that matter for commercial real estate strategy. Marcus & Millichap reports that employers added 162,000 jobs in August, with June and July revised higher by a combined 55,000 positions. Roughly 80% of August’s net job creation was concentrated in food services, local government and health care, highlighting how gains are skewed toward specific sectors rather than broadly distributed across the economy.
Despite those additions, labor market conditions remain uneven. Hiring is described as sluggish, even as employers continue to report challenges finding workers. BGO Chief Economist Ryan Severino notes contradictions in labor market narratives, observing that companies can struggle to fill roles at the same time that graduates have difficulty securing their first professional jobs.
In August, the unemployment rate held at 4.1%, yet Severino cites survey data showing that 35% of small-business owners reported job openings they could not fill. The picture is particularly mixed for younger workers. Employment among 22-to-25-year-olds declined 1.9% between November 2022 and June 2026, even as employment increased for every older age cohort over the same period.
Job patterns also diverge across occupations with different exposure to artificial intelligence. Among AI-exposed roles, employment for younger workers fell about 11%, while mainly non-AI-reliant jobs showed roughly a 10% increase. Severino cautions that these figures do not prove AI is the cause, emphasizing that hiring decisions also respond to business conditions, training costs and management expectations about what AI might eventually do.
The manufacturing sector illustrates another dimension of the labor divide. Marcus & Millichap notes that manufacturing added 16,000 jobs in August, marking its third straight monthly gain, while job openings in the sector rose by 79,000 in July. The firm reports that many manufacturers still face difficulty finding skilled workers, suggesting that labor availability remains a headwind even amid expansion.
These dynamics complicate how commercial real estate investors and developers interpret employment data. Marcus & Millichap points out that job growth has traditionally signaled where to build and invest, but the current environment requires closer attention to the types of jobs being created, employers’ labor needs and the locations that attract hiring activity, rather than relying solely on national job totals.
Property type adds another layer. In multifamily, Marcus & Millichap indicates that slower immigration could eventually weigh on household formation and apartment absorption. At the same time, Bank of America reports that lower-income households are recording the strongest wage gains among income groups. According to Marcus & Millichap, this trend may be supporting Class C apartments, where July renewal rent growth remained near 3% and renewal conversion reached roughly 60%, the highest level since 2022.
For younger professionals still establishing careers, Severino notes that delayed relocation or independent household formation can follow from labor market challenges. Conversely, markets that attract expanding employers may gain renters. On the office side, Severino highlights that companies effectively deploying AI can, in some cases, expand both total and entry-level employment faster than peers that adopt later, suggesting that technology investment can coincide with job growth.
Overall, the commentary underscores that CRE demand will follow not just aggregate job gains but also the mix of industries, occupations, age groups and corporate strategies driving employment, as well as the geographies that benefit from those shifts.
