Q2 2023 Economic Reports

GDP GROWTH: TRENDING IN Q2 2023

The Commerce Department said the U.S. economy grew at a 2.4% annual rate in the second quarter, an increase from the 2% gain in Q1, defying both expectations and attempts by the Federal Reserve to slow it down to curb inflation.

Economists are now scaling back their prediction that national output will be pushed into a recession this year due to recent interest rate hikes by the Federal Reserve to reduce inflation. The central bank has raised the benchmark rate 11 times since last year. A unanimous decision by the Federal Open Market Committee in late July raised the benchmark rate to a range of 5.25% to 5.5%, a 22-year high.

Meanwhile, inflation was held in check in the second quarter. The personal consumption expenditures price index gained 2.6%, down from a 4.1% first-quarter rise and well below the Dow Jones estimate for a gain of 3.2%. “It’s great to have another quarter of positive GDP growth in tandem with a consistently slowing inflation rate,’’ said Steve Rick, chief economist at TruStage. “Consumers are getting a reprieve from the rising costs of core goods, and the U.S. economy is off to a stronger start to the first half of the year.”

Q1 2023 Economic Reports

GDP GROWTH: TRENDING IN Q1 2023

The nation’s gross domestic product slowed dramatically in the first quarter, reflecting reduced production of goods and services that rose at a seasonally adjusted 1.1% annual rate in the first three months. Nevertheless, the Q1 data released by the Commerce Department shows that consumers still are spending despite higher prices driven by high inflation, which the Federal Reserve is trying to stifle by raising interest rates. Spending on travel, restaurants, and other services continues to rebound. Purchases of goods also rose after four straight quarters of declines.

EMPLOYMENT: TRENDING IN Q1 2023

Although nonfarm U.S. employment gains totaled 236,000 in March and the 3.5% unemployment rate was little changed, job openings fell to their lowest level in nearly two years, a sign to some economists of an easing labor market.

MONETARY POLICY: TRENDING IN Q1 2023

The Federal Reserve increased interest rates twice in the first quarter, bringing the benchmark borrowing rate to a new 4.75%-5% target range – the highest since the mid-2000s – as Fed Chairman Jerome Powell signaled the need for more tightening was increasing.

GLOBAL ECONOMY: TRENDING IN Q1 2023

It’s been one year since central banks began raising interest rates to slam the brakes on inflation. Although pricing pressures have receded, risks to financial stability have increased along with pessimism that a soft landing can be achieved.

ULI: Emerging Trends in Real Estate® 2023: United States and Canada

Dig deeper into this year’s “places to watch” from the top real estate hotspots to a possible Sun Belt “cool-down.”

Featuring the latest data from almost 1,500 industry experts, the report is a key indicator of the sentiment steering real estate and investment and development trends around the globe.

Top Three Take Aways:

1. There is a “new normal” for real estate markets after all the pandemic-fueled market distortion. Learn why the 1,500 leading industry experts interviewed for the ULI and PwC US Emerging Trends in Real Estate® 2023 report remain upbeat about the sector as it “normalizes” despite economic shifts, behavioral changes from work at home, and environmental, social, and governance (ESG) concerns affecting decisions on where and when to invest.

2. Discover the top 10 real estate markets to watch. Find out how Sun Belt “Supernova” Nashville managed to repeat its position as the nation’s top market, learn about Boston’s success in leveraging its world-class concentration of higher education to become a world leader in life sciences, and hear which other markets are on the rise.

3. Some still like it hot, but the Sun Belt may be cooling. Nine of the top 10 markets to watch remain in the Sun Belt. The average year-round high temperature among the five top-rated U.S. real estate markets is a balmy 76 degrees Fahrenheit, almost 20 degrees warmer than the 57-degree average in the bottom five markets. Get expert insight into which of these hypergrowth markets are now experiencing growing pains as their success demands greater investment in infrastructure and regional planning to facilitate growth if they are to keep their appeal.

Research | Inflation, The Economy, and Commercial Real Estate

In June and July of this year, the Fed raised the interest rate at the fastest pace in forty years: it raised the federal funds rate 75 basis points at each open market committee meetings. Why did it do so, and what do its actions and current economic data say about the economy? This report will investigate and answer these questions, as well as explore the thinking that is guiding the Fed’s policies and explain the implications of these policies for commercial real estate.

INFLATION AND THE ECONOMY

• What is the federal funds rate and what did the Fed do with it in June and July of 2022?

• Why did the Fed raise the fed funds rate by so much in June and July?

• What does current economic data say about the state of the economy?

• What does the mixed economic data imply for future Fed policy regarding rate?

COMMERCIAL REAL ESTATE IMPLICATIONS

• Given future increases by the Fed and current inflationary conditions, what implications does this have on commercial real estate?

Life Science: Thriving As Never Before

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Life science real estate, along with data centers and industrial real estate, has thrived enormously over the past two years of the pandemic. As the world economies transition to a new phase, where COVID-19 is understood to be in an endemic state, there are no signs that demand for this fast-growing niche in commercial real estate is diminishing. The demand for lab space is only intensifying. This report will identify and explain the trends causing the increased demand for life science buildings.