Core pricing pressures subside further. The headline consumer price index rose 3.7 percent year-over-year in August, the second month in a row that the metric ticked up. While this could suggest a re-acceleration of price hikes, the cyclical nature of the increase suggests that inflation is still broadly slowing. Over one-half of the rise was due to a…

Consumers prioritize necessities as debt builds. Overall U.S. retail sales rose 2.5 percent year-over-year in August; however, core spending — which excludes gasoline and auto purchases — ascended 3.6 percent during the same interval. Momentum over the past year led to a core sales record in August of nearly $509 billion. The restaurant and bar, as well as the health and personal care, segments were largely responsible for the pronounced annual gain in core sales, with… Read More

Steady return of urban activity keeps conditions tight. Vacancy held unchanged at 1.8 percent across the city during the second quarter of 2023, marking a 21-month span during which the rate has remained at this two-decade low. Conditions are still tightening in Midtown and Midtown South, as increasing office usage has brought some professionals back to central Manhattan neighborhoods. Placer.ai data indicates that midweek visits to offices in the borough reached 68 percent of the…

Labor market dynamics becoming more familiar. Job growth in August tallied 187,000 positions, one of the slowest months for hiring in the pandemic recovery period. Headcounts declined in the information and transportation sectors, heavily influenced by Hollywood strikes and the bankruptcy of trucking company Yellow. Even without these one-off factors, the labor market is displaying clear signs of returning to…

“Supercore” CPI at favorable level. The headline consumer price index increased by 3.2 percent year-over-year in July, trending up slightly from June’s 3.0 percent reading. Accelerated cost increases for food and some forms of energy ticked up the headline statistic for the first time since June 2022. While this could signal a bumpier inflation path ahead, market expectations for a continued CPI slowdown are anchored by a…

Rising Insurance Costs and New Policy Limitations Erode Commercial Real Estate Owners’ Margins The accelerated cost of insurance is impacting the commercial real estate sector on multiple fronts. Heightened premiums are raising overall apartment expenses for owners, making it more difficult for developers to underwrite projects. Cost spikes are also altering property valuations, impacting deal flow in states with higher environmental risk factors. Key Features Include:  Impact of rising insurance costs on apartment expenses, property… Read More

Thrifty consumers purchasing school supplies well in advance. Store-based retail sales, which exclude purchases made online and at restaurants and bars, rose 0.6 percent in July — the largest monthly gain since January. An earlier start to the back-to-school shopping season aided retailers last month, with combined spending across the…

Job growth returns to more familiar, positive territory. Employers added 187,000 new positions in July, the second-slowest month for employment growth since December 2020, when staff counts retracted. July’s hiring was nevertheless still 61,000 roles ahead of the monthly average going back to 1980. The drawback in job creation was not unexpected, as the 9.6 million open positions in June was the lowest in two years. Together, these statistics reflect a downshift in…

U.S. economic growth accelerates. Real gross domestic product increased at an annualized rate of 2.4 percent in the second quarter of this year, outpacing consensus expectations for 1.5 percent growth. It also marked an acceleration from the 2.0 percent advance during the first three months of 2023. Gains in consumer spending, non-residential fixed investment, private inventory investment, as well as state, local and federal government spending, contributed to…

Hiatus short-lived as Fed re-commences rate hikes. On July 26, the Federal Open Market Committee announced the first fed funds rate increase in nearly three months, raising the metric by 25 basis points to a lower bound of 5.25 percent. This follows a pause in June during which the target rate remained flat, as the FOMC chose to observe the impact of previous rate hikes in order to calibrate policy moving forward. The Fed called… Read More