I think the title sums it up perfectly. This has been one wacky summer, one like I can’t remember in the past, economically and otherwise. Let’s look at the issues that have been affecting the economy this summer and where we go from here. Domestically it is most complex. Everyone hoped for a positive Trump effect on the economy that still hasn’t materialized yet. Will it ever? There is still time and I am eternally optimistic, especially for the commercial real estate market. We have record low unemployment, extremely low gas prices, very low interest rates and inflation. So what’s up?? Uncertainty in my opinion. We have major issues in flux such as healthcare, tax reform, business regulation and immigration. With the outcome of these issues still evolving it is difficult for businesses to figure out what to do next. If they make a major commitment on one or the other there could be hell to pay when the issue does get resolved. So the answer is to tread water and wait. But life and business wait for no one so what can be done? Small moves, conservative moves to keep moving without making any big decisions. Things on this domestic front will hopefully become more clear by the end of the year allowing more expansion.
Internationally we have lots to talk about, from potential war with North Korea, reshoring jobs, energy battles, Russians, border issues, I could go on and on. Bottom line is that if your company has involvement with one or more of these issues it is also difficult to move forward without resolution. The timetable on this front is much more uncertain. Any one of these issues could explode in short order which would quickly change everyone’s priorities and by result affect the economy.
While there are plenty of negatives out there things are never one sided. With low interest rates capital is still easily attainable and people can take advantage of the low inflation. Plus manufacturing is starting to come back to the U.S. and if that can take hold the economy could really take off. The low gas prices have made it easier for people and companies to travel, which also applies to airfares. The corporate tax rate and capital gains tax improvements are low hanging fruit that should have bipartisan support and be picked any day now. All the while technology moves faster and faster eliminating jobs yet making companies more profitable and able to withstand the uncertainty better than before. Retail is transforming before our eyes and the grocery sector is next. Industries and companies are appearing and disappearing at a record pace. All in all a very exciting, transformational, uncertain and crazy summer indeed, economically and otherwise. These changes could also spell out interesting shifts within the commercial real estate market, optimistically so. As always thanks for reading and have a great day.