No Broad-Based Economic
Decline Despite GDP Performance
I can’t recommend strongly enough that you take 6 minutes and watch the video from the link below where John Chang, Senior Vice President/Research Services for Marcus & Millichap, discusses multiple factors one must consider in determining if we’re in a recession or not. Chang makes a very compelling case that we are not.
JOBS
To date in 2022, we’ve added 450,000 jobs per month. Between 2010 and 2020, a ten-year term, the United States averaged adding 195,000 jobs per month. We’re currently adding jobs at more than double the ten-year average.
UNEMPLOYMENT
The current unemployment rate stands at 3.60%. In March 2020, the rate was 3.50%, the lowest unemployment rate in 50 years.
FEDERAL FUNDS RATE
The Federal funds rate stands at 2.25% – 2.50%. This is the same range as was seen in July 2019…before the pandemic.
INFLATION
Yes, inflation is high at 9.10% but it is driven primarily by food and energy costs which have been partially impacted by the war in Ukraine. Without food and energy, inflation stands at 5.90%. Yes, not the 2.0% to 3.0% the Fed strives for but well below 9.10%. Many believe we have peaked relative to inflation with prices beginning to have stabilize as supply chain and other factors impacting pricing are recalibrating.
MULTI-FAMILY VACANCY
Nationally, multifamily vacancy stands at 3.20%. But this comes on the heels of 1Q2022 when it was 2.20%…the lowest ever historic vacancy rate.
Chang argues convincingly that one needs to look past GDP performance over the past two quarters and focus on the realities occurring across the broad-based economy.
Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on the entire market, economic, financial and real property, and its overall impact on multifamily housing. The firm’s primary focus is on multifamily properties comprised of 10 to 60 units and working with those owners to make an impactful difference in improving the performance of their property along with working to increase asset value.
Please find us at www.svikhart.com or contact me directly at 801-550-5684 to learn about the range of real estate services our firm provides.
PREVIOUS POST
NEXT POST