Occupancy Growth Muted in Early Q2

The U.S. labor market bounced back in March to reverse February's losses. While the headline was positive, the U.S. has not posted consecutive months of job gains since April and May 2025. A bad month of growth has followed a good one the past year, and that was before the potential economic impact of the conflict in Iran.

• Headline Growth: The economy added 178,000 jobs in March, roughly three times higher than economists predicted. Average hourly earnings were up 3.5% from the prior year, still in a solid range to support rent growth for areas where multifamily demand and supply are in balance.
• Industry Divergence: Healthcare added 76,000 jobs, and about half of it was from physicians returning to work after striking. Leisure and hospitality added 44,000 jobs and construction added 26,000. The federal government (-18,000) and financial activities (-15,000) lost jobs.
• Shrinking Workforce: The unemployment rate ticked down to 4.3%, but largely because the labor force shrank by 400,000 people. The labor-force participation rate fell to 61.9%, its lowest level since 1977 when excluding the pandemic era.

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