The Labor Shortage Narrows But Is Still A Significant Hurdle Entering 2023

Consumer Sentiment Falling Sharply

• The Michigan University Consumer Sentiment Index reached a record low in 2022, but is beginning to rise

• Space demand in the multifamily sector moves closely with consumer sentiment historically, with potential renters making decisions based on their financial expectations

Pandemic-Era Savings Beginning To Pare Down

• Savings, which had ballooned during the pandemic, have fallen by roughly $400B since August, meaning savings could move back to its historic trend in 2023

• While consumer credit is still in a manageable range, dwindling savings could weigh on consumer spending in the next 12 months

The Labor Shortage Continues to Limit Growth

• The gap between job openings and unemployed workers is still at 4.3 million workers, despite the headline grabbing tech layoffs

• The wide array of open positions suggests the country may continue adding jobs in the coming months despite headwinds in the economy, aiding space demand for CRE