The labor market will likely continue to struggle in 2009, and as a result, tenant demand for commercial real estate may not \u201cfirm up\u201d until 2010, according to Bob Bach, senior vice president & chief economist for Grubb & Ellis Co.The Labor Department said on Thursday that the number of initial job claims soared 58,000 in the week ended Dec. 6, to 573,000, a 26-year high, as companies slash jobs as part of their efforts to survive the economic turmoil. Meanwhile, the four-week moving average of jobless claims rose from 526,250 to 540,500.Job creation is a direct driver of demand for office space, and it plays a more supporting role in demand for apartments, shopping centers and industrial properties. The deteriorating labor market suggests that \u201cthe leasing market\u2019s fundamentals are going to be under some downward pressure next year,\u201d Bach told CPN.The recession has entered its twelfth month, longer than the 1990-1991 and 2001 recessions, which both lasted for eight months, according to Bach. He expects to see continued job losses through next year, but they are likely to be more intense during the first half of the year before beginning to subside during the second half of the year. \u201cThe downturn seems to be gaining speed,\u201d he said. He added that the labor market is a lagging indicator and one of the last variables to really change direction. \u201cFor that reason, even if we see modest GDP growth in the second half of the year, the labor market, as the last economic indicator really to turn around, probably won\u2019t until the end of the year,\u201d Bob said.What is particularly worrisome to Bach is that economists have been frequently downgrading their forecasts since the middle of September. \u201cI don\u2019t know that we\u2019ve really seen the worst of it yet,\u201d he said. \u201cI don\u2019t think the economy\u2019s really hit bottom or found the bottom.\u201d He is, however, somewhat optimistic about 2010. \u201cI\u2019m hopeful that we\u2019ll begin to see some modest job creation maybe as early as the first half of 2010.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The labor market will likely continue to struggle in 2009, and as a result, tenant demand for commercial real estate may not \u201cfirm up\u201d until 2010, according to Bob Bach, senior vice president & chief economist for Grubb & Ellis Co.The Labor Department said on Thursday that the number of initial job claims soared 58,000…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003922615","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n