So, in the last story, I mentioned that the Fed isn’t factoring in COVID anymore. I wanted to go deeper on that point, so let’s quote from Axios:
In the U.S., we’ve gone from a labor market of plenty to one of scarcity. A half-million workers died, many retired earlier than expected, and immigration fell. The workforce itself is still short on workers.
- The labor force grew by an average of 1% a year in the postwar period, up till COVID, said RSM’s chief economist Joe Brusuelas in a note late last year. Now growth has settled below 0.5%.
- That means higher wages and a landscape where workers have at least a smidge more power than before. It also means a stronger push toward automation wherever employers can do it — more fast-food ordering kiosks and drugstore self-checkouts.
Office workers don’t always work in offices anymore. It’s leading to huge changes in cities — all those half-empty offices, the restaurants that no longer feed hordes of desk jockeys.
- People working remotely want bigger homes; and more amenities in regions that didn’t need them before. That has meant big changes in the real estate market.
And another data point:
According to swipe data from Kastle Systems, office occupancy hit a new post-pandemic record this week at 50.4%. Half full or half empty? The figure has largely plateaued since September, hinting at a new reality where people work from home much more.
Why do we care?
I felt like this is the second portion of the day’s story. The market has changed and is becoming more consistent. Half-full offices have been the norm since September, and I’d offer that worker power has also been increasingly strong.
It’s the secondary effects to look for with your customers. Where are their businesses growing? Shrinking? Where can you find a new space to be the expert?