You recall the Wall Street rally as of late and much of it was attributed to the somewhat rosy employment picture. The Department of Labor reported earlier this month our economy created 287,000real estate investingnew jobs. Quite an improvement over the previous month and in our new reality, 287,000 is actually quite good. Historically, new job creation over 300,000 helps to jump start the economy but 287,000 is still very near close to that number. Wall Street reacted and last week both the Dow and S&P 500 hit new highs. But the headline unemployment rate of 4.9% and the expectation of just 175,000 new jobs helped jolt the markets. Digging a bit deeper however tells perhaps a different tale and maybe one of the reasons equities are giving up gains over the past two days.

According to a story released today on cnbc.com* there are some other data points that deserve some attention. The article pointed out that both personal and corporate income tax receipts have fallen year over year by 11.3 and 16.0 percent respectively. Federal excise taxes also fell during the same period by 0.8 percent. State sales tax receipts haven’t fallen but actually increased but only by a paltry 2.5 percent. Federal withholding amounts have dropped an eye-popping 17 percent. So what does this all tell us?

It tells us we’re not out of the woods as it relates to stocks. Both new job postings and wage growth are down as well. What hasn’t fallen however is commercial real estate. In Chicago for example, property values for apartment buildings have been on a steady increase as vacancy rates are some of the lowest we’ve seen while rental rates continue their upward climb. Investors who take the time to thoroughly review June’s employment numbers may soon indicate a sell-off and increased investment in bonds and mortgage-backed securities, keeping a lid and possibly lowering financing costs for investors.

*cnbc.com July 18, 2016