September Payrolls Add 29,000 Jobs As Office-Using Sectors Shed Them

The industries that lease the most office space stopped adding jobs. Revisions, not the headline, carry the larger message.

Those three sectors lost 26,000 jobs combined in September (derived). They are a proxy for office-using employment, not a measure of it. BLS does not report by occupier type.

Prior-month revisions took 31,000 off July and 29,000 off August (derived), so the trend is weaker than the first prints suggested.

Office absorption has to come from net hiring or from tenants taking more space per head. With white-collar payrolls negative, leasing volume is substituting for headcount growth, not following it.

Implications

Do not underwrite office lease-up off expansion demand. Base cases should assume flat to negative net absorption from white-collar tenants and rely on relocations and flight to quality. Lenders should stress tenant-count assumptions on any office loan sized to growth.

Flags: Single government source, preliminary and subject to revision. 'Office-using' is a CRE360 grouping of three BLS supersectors, which also include non-office jobs. Combined losses and revision totals are CRE360 derivations.