Banking shock prompts Fed to take a more measured approach. At its March 22 meeting, the Federal Open Market Committee raised the federal funds rate for the ninth time in 12 months. The 25-basis-point hike matches the margin from February and lifts the lending rate’s lower bound to 4.75 percent. The FOMC cited still-too-high inflation and a persistently tight labor market as reasons for necessitating the increase, which is nevertheless below what was anticipated by… Read More

Job growth continues at generally swift pace. Employers added a net 311,000 personnel to payrolls in February, down from January’s robust 504,000-position gain, but still above the long-term monthly average. Hiring was likely aided by an expansion to the labor pool last month, leading to a 10-basis-point uptick in the unemployment rate to 3.6 percent. Despite this slight increase to unemployment and a slowdown in job growth, the labor market is still showing…

Consumers place an emphasis on necessities. Total retail sales dropped 0.4 percent in February. However, store-based spending — which excludes purchases made online and at restaurants and bars — reached a record mark. This contrast indicates consumers may be prioritizing the purchase of necessities when visiting brick-and-mortar retailers, a dynamic that has positive implications for…

Bank Closures Could Sway Federal Reserve Decision, Fast Government Response Alleviates Contagion Concerns The collapse of Silicon Valley Bank and Signature Bank sent shock waves through capital markets, but agencies have been quick to counter it from spreading. Expectations for a smaller interest rate hike at the upcoming FOMC meeting has meanwhile been a byproduct of the recent events. The Fed will likely tread more cautiously despite persistent inflation and resilient employment. Key Features: Timeline… Read More

Prominent tech and venture capital bank closes. Silicon Valley Bank (SVB), the country’s 16th-largest bank, was seized by California state regulators on Friday, March 10 and placed into FDIC receivership in the largest banking collapse since 2008. Recent troubles in the technology and cryptocurrency sectors, of which SVB was a prominent financier, led to major deposit outflows at the bank, forcing the institution to sell bond holdings before their maturity to procure cash to cover these… Read More

All brick-and-mortar categories record monthly increases. Store-based retail sales, which exclude spending online and at restaurants and bars, climbed 1.7 percent in January, marking the largest monthly rise in nearly two years. Reversing a recent down trend, gains were widespread across store types, highlighted by notable improvements in furniture, appliance and clothing-related purchasing. This broad-based increase signals that consumers, while pressured by inflation, still have solid cash reserves and borrowing capacity following the holidays, a boon… Read More

Employment gain hits highest point in nearly a year. Job growth surged in January, as a net 517,000 positions were created on a seasonally-adjusted basis. January’s employment gain not only surpasses last year’s monthly average of 401,000 jobs, but it was also the most active period for hiring since February 2022. While the end to a California education labor dispute contributed to a jump in government onboarding, most of the job additions were in the… Read More

Retail real estate generally outperformed investor expectations throughout the pandemic and enjoyed a healthy bounce last year in regards to rents and operations. This positive momentum has drawn increasing investor attention. To help investors capitalize on the nuances of the current climate, Marcus & Millichap presents the 2023 Retail National Investment Forecast. Key Features Include: A detailed outlook for the U.S. retail sector in 2023 Metrics, forecasts and analyses for 50 markets across the country… Read More

Softening economic data warrants less-assertive rate increase. The Federal Reserve has extended its tightening cycle into 2023 by raising the federal funds rate to a lower bound of 4.50 percent. The 25-basis-point increase is nevertheless the smallest hike since March of last year, reflecting both easing inflation pressure and diminishing economic growth. Headline CPI actually dipped 0.1 percent on a monthly basis in December, for a year-over-year change of 6.5 percent. The 14-month low in consumer… Read More

Slowing rate of inflation a welcome sign. Core retail sales in the last month of 2022 were up by 7.2 percent year-over-year. Despite a notable upward stretch, spending may be softening. December’s retail sales volume was a step back from recent months, a potential signal of the challenges facing consumers in the year ahead. While overall cash savings is some $4.4 trillion above the pre-pandemic mark, not every household was able to set aside funds. These… Read More