Bipartisan agreement avoids potential catastrophe. President Biden and House Speaker McCarthy reached a tentative agreement on May 27 to suspend the debt limit until January 2025. This bill, known as the Fiscal Responsibility Act of 2023, was approved by the House of Representatives on May 31, and the Senate on June 1, before going to the president for his signature. Treasury Secretary Yellen provided an estimated date of June 5, at which point reserve funds would… Read More

How the health crisis continues to impact all forms of CRE Which property types and locations are benefiting? How long-term trends will evolve in the post-covid economy

Hiring reaches four-month high. Employers across the country created 339,000 new jobs last month, the most since January. Hiring occurred across industries, as only the manufacturing and information sectors reported net staff contractions. The number of self-employed individuals also declined notably in May, contributing to a…

Lessons Learned from Previous Near-Default Debt Ceiling Negotiations Indicate Potential Ramifications of the Holdup Congress and the president have been slow to reach an agreed resolution to the debt ceiling, which was hit earlier this year. The Treasury has been relying on reserve funds to meet expenses, but estimates expect those measures could be exhausted as soon as early June, forcing cost-cutting elsewhere to avoid a default. Even a last-minute agreement can have implications for… Read More

Which markets are outperforming for each property type? How local trends can run counter to the national norm Insights on 6 major commercial real estate property types

Inflation descending at a more subdued pace. Annual growth in the headline consumer price index (CPI) slowed to 4.9 percent in April, marking the 10th month in a row that this metric has decelerated since the Federal Reserve began tightening policy in the current cycle. Increases in the cost of borrowing have chipped away at household demand for major purchases, including for homes and new vehicles, which are often financed. The price index for shelter increased… Read More

Consumption tailwinds back demand for available space. Labor market resiliency, wage growth and easing inflationary pressures aided consumers’ spending power in April, supporting a 0.6 percent increase in core retail sales. Households concentrated their spending on essential goods and seasonal items during the month, generating sales growth across the…

Labor market continued to grow in April. Employers created 253,000 positions in April, up from the 165,000 jobs added in March but below the year-to-date monthly average of 285,000. Hiring last month spanned most sectors, ranging from technical health care and professional services roles to hourly restaurant positions. April’s employment growth, paired with a reduction in the labor force, was enough to dip the unemployment rate back down to a historical low of 3.4 percent. Unemployment… Read More

Why the Fed is having problems with wage growth Three forces sustaining the labor shortage How the labor shortage is affecting the CRE market

Federal funds rate pushed to 16-year high. On May 3, the Federal Open Market Committee lifted the overnight lending rate to a lower bound of 5.0 percent, a 25-basis-point shift. The FOMC has raised the federal funds rate a combined 75 basis points so far in 2023, just one-sixth of last year’s total shift. Going forward, the path is more open. Chairman Powell stated that the FOMC will take a meeting-by-meeting approach to any further monetary… Read More