Market Commentary Blog:macroeconomic fundamentals

We often get questions about where we are in the cycle. REITs and real estate are tied closely to the macro economy’s turns through expansion and recession. While the crystal ball is never very clear about the medium-term outlook, we can make several statements about recession risks. 

Nonfarm payroll employment rose only 142,000 in September, far below recent trends, and gains in prior months were revised down as well. There’s little good news in this report concerning the economic outlook, as there was no gain in average hourly earnings, and labor force participation slipped further, indicating that weak demand for labor is keeping some potential workers on the sidelines.

REITs and other owners of commercial properties are likely to benefit from a favorable balance of supply and demand in the months ahead.