Early Signs Point to Improving Office Sector; Investment Trends Begin to Reflect Changes During the fourth quarter of last year, office net absorption exited the red for the first time in 15 months, pulling nationwide vacancy down 10 basis points. Over 21 million square feet on net was newly occupied between October and December, comparable to an average quarter in 2019. Nearly three-fourths of all major U.S. markets recorded positive net absorption. Key Features Include:… Read More

March logs the 39th straight month of job gains. Employment growth reached a 10-month high in March as 303,000 positions were added, while the unemployment rate adjusted down to 3.8 percent. Hiring was most prominent in health care, government, construction, and leisure and hospitality. Additions in health care and leisure and hospitality, in particular, should help ease staffing shortages in…

Consumers’ priorities reflected in annual gains. While the 2.2 percent year-over-year gain in total core retail sales reported in February failed to match the 3.8 percent rise in core CPI, three key categories bucked this trend. Rising sales amid moderating or falling prices point to what purchases households are prioritizing amid tightening budgets. Factoring in inflation, apparel sales rose 1.3 percent year-over-year in real terms last month, while electronics and appliance sales grew by…

Inflation trends cloud Fed’s path. Still-elevated inflation is leading Wall Street participants to delay expectations for the Federal Reserve to start cutting interest rates this year — shifting from spring to summer. Alongside strong hiring in the opening months of 2024, February’s higher headline CPI reading contributed to the Federal Open Market Committee’s  decision to hold the federal funds rate at a 5.25 percent lower bound in March. Fortunately, core CPI, which strips out the more… Read More

Rising unemployment releases pressure on inflation. Employment growth accelerated in February with 275,000 jobs created, yet the unemployment rate also rose by 20 basis points to 3.9 percent. While the highest rate of unemployment in 25 months may be interpreted as a negative signal, in this case some labor market softening could be a positive sign, especially when paired with healthy employment growth. After more than two years of sub-4 percent unemployment, the additional 150,000 people… Read More

Dual retail categories buck the larger trend. In January, for the first time since March of last year, core retail sales fell on a monthly basis, a reflection of more consumers avoiding big-ticket, discretionary purchases. The 0.5 percent decline in core spending, however, overshadowed sales at restaurants and bars, as well as grocery stores, which each rose in both real and nominal terms last month to record levels. Collectively, the two categories accounted for…

Inflation metrics present mixed bag. The headline Consumer Price Index rose 3.1 percent over the year ended January, down 30 basis points from the December reading. Falling energy prices and flattening costs for food helped slow inflation, as supply chains remained fluid despite ongoing global conflict. However, when stripping these indices out, the core CPI measure held at 3.9 percent over the year ended January, the same annual rate as last month. While sustained core pricing… Read More

The year kicks off with strong job growth. Total employment rose by 353,000 in January, the largest increase since the same month in 2023, and similar to the 333,000 roles added in December. Unemployment held steady at 3.7 percent for the third month in a row despite this increase. Job gains predominantly occurred in…

Demand for Multifamily Housing Improving Amid Durable Economy, But Benefits Disguised by Ample New Supply Following a year of above-expectation economic growth, momentum appears to support sturdy, albeit modest, gains in 2024. Against this generally positive backdrop, the multifamily sector is contending with its own dynamics, chief among them being the challenge of record new supply. How each market responds to this and other issues will be unique. The 2024 National Multifamily Investment Forecast offers… Read More

Markets predict Fed cut in March, even with bump in CPI. Headline inflation ticked up to 3.4 percent over the year ended December 2023, as both energy and shelter costs accelerated during the month. While this higher reading appears to complicate the Federal Reserve’s stance on monetary policy in 2024, market probabilities for a rate cut in March actually grew over 500 basis points, to about 70 percent shortly after the CPI data release. The… Read More