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FIGURES I MINNEAPOLIS OFFICE I Q32024 <br />National Economic Overview <br />Soft landings are rare, but recent data suggest that this outcome for the economy <br />is increasingly likely. Business investment is steady and consumer distress is <br />confined to a few vulnerable segments. Discretionary spending, such as travel, is <br />generally on a par with last year although many signs indicate the post -pandemic <br />spending boom is over. The key threat to consumption is a downturn in the labor <br />market, although the recent bump in unemployment appears mainly driven by an <br />increase in participation. <br />One reason for concern is the decline in the share of private industries that are <br />creating jobs. The labor market has slowed but it is not slumping, and companies <br />are not letting workers go at a particularly high rate. <br />While many are focused on November's election, the most consequential policy <br />lever has already been pulled via the FOMC's 50 bps September cut and signaling <br />another 50 by year-end. This easing of financial conditions combined with <br />continued economic growth should support modest hiring and consumption that <br />precedes tighter commercial space market fundamentals. This backdrop will <br />breathe fresh wind into real estate transactions markets and coincides with other <br />signals that cap rates have peaked and may be starting to fall in some sectors. <br />CBRE RESEARCH <br />Minneapolis/St. Paul Employment Update <br />3,9% Employment Change by Sector - Yearly + Monthly <br />- Bars indicate yearly trend, arrows indicate monthly trend <br />Unemployment Rate <br />2.0 M <br />- Labor Force <br />A 458.4k <br />Office Using Jobs <br />A 543.7k <br />Industrial Using Jobs <br />• 260.7k <br />Retail Using Jobs <br />Education and Health Services <br />Anancal Activities <br />Government <br />Information <br />Leisure and Hospitality <br />Manufacturing -1490 <br />Mining and Logging <br />Professional and Business Services -1,90 <br />Retail Trade <br />Service Providing <br />Transportation and Utilities <br />Wholesale Trade <br />-690 <br />21.50 <br />Note. Arrows indicate month -over -month change. <br />Minneapolis/St Paul Unemployment Rate and Labor Force Trends <br />Source: US BLS, August2024 <br />Labor Force <br />22M <br />21M <br />2.OM <br />1.9M <br />1.8M <br />a' o o u a ¢' <br />Total Labor Force Unemployment Rate <br />14% <br />12% <br />10% <br />8% <br />6% <br />4% <br />2% <br />0% <br />o <br />Source US BLS, August 2024 <br />© 2024 CBRE, INC. <br />