A Fresh Take on CRE

Good News Friday - From Bob Bach




Bob Bach, Chief Economist of Grubb & Ellis has started sending out weekly Good News Friday reports to Grubb & Ellis employees (ok, he has for a few months and I haven't been on the ball). Anyway, I've decided I'm going to start passing these on for your enjoyment. We can all use a little bit of good news right now.

Trifecta of Good News

Here are three hopeful indicators released just this week:

  • The Conference Board Leading Economic Index rose sharply for a second consecutive month. Vendor performance, the interest rate spread, real money supply, stock prices, consumer expectations and building permits pushed the index higher in May, outweighing negative contributions from weekly hours and initial unemployment claims. Over the past six months, the index rose 1.2 percent, the first time the index has increased over a six-month period since July 2007.

  • The Labor Department reported that continuing jobless claims fell by 148,000 to 6.69 million during the week ending June 6th. It was the largest decrease in seven years and breaks a string of 21 consecutive increases. Initial jobless claims rose slightly during the week ending June 13th, however.

  • The American Bankers Association's economic advisory committee, a group of economists for large banks, predicted that real GDP will turn positive in the third quarter, thus bringing an end to the recession. The committee also expects housing starts to move up later this year and home values to increase moderately in 2010. Here is a link to a Bloomberg article on the committee’s findings.

Not all recent news is optimistic, and not all aspects of these indicators are positive. But this is the norm when the economic cycle is shifting from recession into recovery. Do not be surprised if the data releases are positive one day and negative the next with a gradual migration toward positive news as the recovery approaches.

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