A Fresh Take on CRE

Good News Friday from Grubb & Ellis Chief Economist Bob Bach


I haven't posted Bob Bach's Good News Friday in awhile, but this is a pretty good one, so I thought I'd pass it on:

Grand Slam of Good News

Maybe it’s just that spring has arrived along with its sense of rebirth and optimism (especially for Cubs fans, whether it’s warranted or not), but it really seems like the news keeps getting better.

  • Last Friday the Bureau of Labor Statistics reported that payroll employment rose by 162,000 in March including 123,000 in the private sector, the best performance in three years. That number comes from the establishment survey. Less noticed was that the household survey, from which the unemployment rate is derived, reported that 264,000 more people were employed in March than in February following an increase of 308,000 the previous month. Coming out of a recession, the household survey is believed to be the more reliable indicator because it picks up hiring by start-up companies.
  • Thomson Reuters reported yesterday that same-store retail sales rose 9.1 percent in March, the strongest monthly gain since 2000 when the company began tracking the data. The gains were spread across all merchandise categories. March sales benefited from warm weather and because Easter occurred a week earlier this year, pushing holiday-related shopping into March. Nonetheless, this performance handily beat expectations for a 6.3 percent increase and seems to signal that consumers are getting back in the game.
  • The Institute for Supply Management’s non-manufacturing index, which tracks the service sector, increased to 55.4 in March. Like the more widely publicized manufacturing index, values above 50 indicate expansion. The manufacturing index has been above 50 for eight consecutive months as business capital spending began to grow again, but the non-manufacturing index has been slower to rebound. The recent strength suggests the recovery is broadening out across the economy.

  • If you didn’t catch it last night, Jim Cramer gave a ringing endorsement for commercial real estate on his CNBC show, “Mad Money.” Click here to read the summary and view the video.
Lastly, if you can’t quite believe that all this good news is for real, take a look at this article in today’s New York Times on why people remain skeptical about the recovery. Economic weak spots persist, but psychological and political factors are at work, too.


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