According to new projections released Tuesday, top Federal Reserve officials expect unemployment to remain elevated for years to come, suggesting that the economic recovery will be too gradual to create rapid improvement in the job market.
The forecast of 17 top Fed officials anticipates that unemployment rate will still be in the 6.8 to 7.5 percent range at the end of 2012. With a 10.2 percent rate in October, it is an improvement, but a slow one to get down to a healthy level of around 5%. They stated that they "anticipated that about five or six years would be needed for the economy to converge fully to a longer run path."
As we have discussed in previous posts, the office space recovery is linked with employment. If there are no new jobs or a slow growth in jobs, office space vacancy will remain high. What this message tells us, if it turns out to be accurate, is that the office space recovery will take at least five to six years going hand in hand with employment growth.
So what does this mean to businesses looking for office space for lease? It means that it will be a tenants market for the next five to six years with rates perhaps dropping a little in the short term and remaining stable for at least the next few years.
Businesses can make sure to take advantage of this opportunity by obtaining the services, at no cost, of a qualified tenant representative.