These Are the Times That Try Optimists’ Souls
This is the phase of the economic cycle where the news is mostly bad – let’s be honest. But there is almost always something in the brew of economic statistics that is cause for optimism. Here is your good news fix for this week:
Exports surged 3.6 percent in July to an all-time high of $178 billion while imports declined 0.2 percent to $223 billion. The narrower trade gap will bolster third-quarter GDP by a modest amount. Global growth slowed in August, and there is reason to expect that exports will slow as well, but so far the news is good.
· The Institute for Supply Management’s non-manufacturing index, which covers about 80 percent of the economy, came in at 53.3 for August, up slightly from July and above the break-even level of 50. Arguably the two most important components, new orders and employment, also signaled modest expansion last month. The new orders generate production activity as those orders are filled.
· Most likely we didn’t slip into recession last month, and the majority of economists (who aren’t very good at forecasting recessions – let’s face it) continue to think we will skirt a near-term recession.
A Request From Your Good News Guy
In tough times like these, a “glass-half-full” research note such as this one runs the risk of sounding insensitive or out of touch with reality like a cheerleading squad oblivious to the fact that its team is far behind. One of the ideas we are kicking around is to turn this into a “Friday News Roundup” – a concise and objective summary of the week’s economic and market-related news impacting commercial real estate. But we’re also considering the option of soldiering on through the tough times when good news is hard to find and might be especially welcome. Let us know what you think.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis
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