TAG Industrial Watch: May 16, 2026

Over the last week, we received big news about the economy that will have real implications on the industrial market in the near and long term. The headline jobs number for April was higher than expected at 115,000. However, this is largely due to the Bureau of Labor Statistics guestimating (literally) that 391,000 jobs were created thanks to the creation of new companies. In other words, if you discount jobs added from the BLS “birth-death” model, the business survey would probably have printed a loss of jobs (and likely will in future revisions). Based on the household survey, total employment fell by -226,000 persons and was down nearly -1.3 million persons year-over-year. Keep in mind that since records began post WWII, annual declines in total employment have always coincided with official recessions.

The skeptical jobs report was followed by higher-than-expected reports on prices. The Consumer Price Index hit a three-year high, up 3.8% annually, while the Producer Price Index (a leading indicator of future consumer prices) jumped by 6.0% to the highest level since December 2022. The combination of job losses and rapidly rising prices equates to every economist’s worst nightmare, stagflation. Consequently, the bond market responded with interest rates on the 30-year Treasury (which is most sensitive to inflation) rising to a 19-year high of 5.05% before pulling back. High inflation and rising interest rates aren’t just bad for commercial property values but for business in general. Though if investors and owner-users have been following TAG’s research, there is no need to lose sleep questioning how you can protect your commercial real estate portfolio or your business from stagflation. TAG initially warned about stagflation back in 2021 and has been advising clients on how to not just survive, but thrive in stagflation.

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