Economic Update: Strong Labor Market, Cautious Consumers, & Shifting CRE Fundamentals

SVN’s latest economic update highlights a resilient U.S. labor market, improving logistics activity, and evolving commercial real estate fundamentals as 2026 begins. January job growth exceeded expectations while unemployment declined, reinforcing a “higher-for-longer” interest rate outlook. At the same time, job openings continue to trend lower and retail sales remain flat, signaling a more cautious consumer environment.

Lending activity is strengthening for larger firms, but credit standards remain tight, and small business optimism has softened amid rising uncertainty. In commercial real estate, office delinquencies reached a new high even as industrial and lodging performance improved, foreclosure activity continues to rise from historically low levels, and office demand is slowly recovering—driven largely by the tech sector.

Meanwhile, slowing population growth and declining migration are reshaping long-term demand trends across U.S. markets.