September 2, 2008

GDP Vs. Job Growth

Gross domestic product, the output of goods and services produced in the U.S., grew at a revised rate of 3.3% annualized in the second quarter. In the first half of the year, annualized GDP rose 2.1% even as the labor market shed 463,000 net payroll jobs through July. The disconnect between GDP and jobs, while not unusual in recent economic cycles, sends mixed signals about the economy. Most analysts think GDP growth will cool in the coming quarters as the tax rebate fades and the global economy slows. Expect leasing market weakness through mid-2009.


Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Grubb & Ellis

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

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Robert Bach
Senior Vice President, Chief Economist
312.698.6754

August 25, 2008

CPI, PPI & Non-residential Construction Costs

% Change Year/Year

Construction costs are off to the races once again due to the summer spike in the prices of oil and some commodities that are inputs to the manufacture of construction materials. Both the Consumer Price Index and the Producer Price Index for Finished Goods hit multi-year highs on a year-ago basis in July. But the recent decline in oil and commodities prices and the strengthening U.S. dollar, both related to slower global economic growth, suggest that inflation may cool in the near term. This should allow the Federal Reserve to keep interest rates low awhile longer.


Source: U.S. Bureau of Labor Statistics, Grubb & Ellis

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

Need more information? Contact:

Robert Bach
Senior Vice President, Chief Economist
312.698.6754

August 19, 2008

Retail Sales
Monthly % Change, Seasonally Adjusted

With the $100 billion tax rebate fading into history, retail sales lost steam in July. Total sales fell by 0.1%, and core sales excluding autos and gasoline rose by 0.3%, the weakest performance since February. Layoffs, sliding home prices, high consumer debt burdens, difficult credit markets and stubbornly high gas prices are taking their toll. The International Council of Shopping Centers forecasts 144,000 store closings this year, the highest jump in the 14-year history of the survey. Expect shopping center leasing market conditions to bottom out in mid-2009.

Source: Census Bureau, Grubb & Ellis

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

Need more information? Contact:

Robert Bach
Senior Vice President, Chief Economist
312.698.6754

August 11, 2008

Job Growth During Last Three Expansions

Total non-farm employment peaked in December 2007, capping an increase of 5.5% over the 73-month period since the economy hit its most recent trough in November 2001. The fact that job growth was slower than in the prior two expansions suggests that layoffs may be muted now that the economy is softening, as noted in last week's Market Update. However, a final comparison won't be possible until the Bureau of Labor Statistics benchmarks its 2008 data early next year, which is expected to reveal a greater loss than the -463,000 reported year-to-date through July.

Source: U.S. Bureau of Labor Statistics, Grubb & Ellis Company

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

Need more information? Contact:

Robert Bach
Senior Vice President, Chief Economist
312.698.6754