Almost definitionally, one of the key drivers of the U.S. office real estate market is job growth. To be sure, trends in the demand for space-per-worker impact total demand, but fundamentally, job growth creates demand growth. The most recent employment data showed an increase of 151,000 non-farm jobs in October, the first monthly increase since May. While encouraging, the rate of gain will need to accelerate if top-end forecasts - estimates the U.S. economy has the potential to add 3-3.5 M jobs a year for the next 3 years - are going to be hit.
One reason for optimism, productivity growth is slowing down. Counter-intuitively, this can be a harbinger of job gains as the current workforce is already producing at capacity and new production must come from new workers.
The following chart from Calculated Risk underscores the depth of job losses and the potential job gains that will bring us back to parity.