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U.S. employment figures confirm Salomon's 'bearish' predictions.

According to a Salomon Brothers research report, "Myth of Recession-Proof Office Employment Dies," by Sandon J. Goldberg, recently revised national employment data for 1990-91 confirm the validity of the firm's bearish projections for the office space market and support the firm's conclusion and support the firm's conclusion that the myth of recession-resistant office employment has been thoroughly debunked during the current downturn.

The government adjusted its previous reports, revising its estimate of the number of office jobs gained in office-intensive employment sectors during 1990 from 230,000 to zero and changing its conclusion that job growth in 1991 was "flat" to instead reflect a sizable loss. The new figures reveal that at the bottom of the cycle yearly job losses were at unprecedented levels. Three hundred thousand office jobs disappeared, the largest loss in the last 20 years, possibly exceeding that of the Depression in the 1930's.

The new government numbers for the business services and finance, insurance and real estate (FIRE) sectors are consistent with recent Salomon tion and vacancy data.

The revised employment numbers confirmed Salomon Brother's projections for most categories: i.e, weaker in office and retail, unchanged in manufacturing and wholesale trade, and slightly improved, although still downward, for research and development.

Underscoring Salomon Brother's findings, the government repeated that three fourths of the job gains in the service sector in the last 12 months have been in temporary help, strongly suggesting lingering weakness in the Brothers findings on real estate absorp-industry

Salomon Brothers said it projects a much more modest rebound in office employment during this recovery than during the last cycle in the 1980's and believes that currently reported job gains will eventually need to be adjusted downward. Specifically, the report said that government figures suggesting an increase of 80,000 to 100,000 jobs in March and April 1992 were probably over-optimistic and unlikely to stand.
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Title Annotation:Review and Forecast, Section V; Salomon Brothers Inc.'s report, 'Myth of Recession-Proof Office Employment Dies' reflected in 1990-91 employment data from federal government
Publication:Real Estate Weekly
Date:Jun 24, 1992
Words:313
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