The Chief Economist: A Holly Jolly Economic Update
As 2024 draws to a close, the holiday season brings a positive economic outlook. November marked a rebound in the labor market with net employment gains exceeding expectations and upward revisions for the prior months. Despite a slight uptick in the unemployment rate to 4.2%, strong average hourly earnings and lower inflation have kept the labor market resilient. Meanwhile, the holiday shopping season started on a high note, with Black Friday and Cyber Monday outperforming expectations in both in-store and online sales. These developments, coupled with better-than-expected vehicle sales, suggest a strong finish for fourth-quarter GDP growth.
In commercial real estate (CRE), retail properties remain the standout performer among major asset classes, buoyed by strong consumer spending and improved efficiency. Retail vacancy rates remain the lowest nationally, driven by adaptability and increasing sales per square foot over the past 25 years. As industrial and multifamily sectors face challenges and office demand remains uncertain, retail's robust performance is poised to carry into the new year. With inflation readings and the Federal Reserve’s final meeting of 2024 on the horizon, the economic narrative concludes on a note of cautious optimism.
