The U.S. economy, specifically the employment market, remains stalwart as growth continued in May. Roughly 340,000 new jobs were added last month, giving many economists hope that we may avoid a recession this year.
Last week we demonstrated the negative impact of falling rates combined with softening occupancy as markets struggling with new supply pressure have seen revenue per available unit (RevPAU) fall significantly.
The Personal Consumption Expenditures Index (PCE) increased unexpectedly last month, which has given economists doubt that the Fed is finished with their current monetary tightening campaign.
Markets struggling with new supply issues are facing dual pressures from occupancy and net effective rent declines, resulting in significant performance issues. Many sunbelt markets in the southeast and southwest are grappling with rapidly declining revenue per available unit.
This will be an important week both from a data and commentary perspective as it relates to the Fed’s future decisions on monetary policy.
Two weeks ago, our chart of the week focused on domestic migration, and some of the strongest counties for in-migration were located in Texas, Florida and the Carolinas.
I anticipate a quiet week on the economic front, as none of the major indicators will be released this week.
Interest rates have increased across the yield curve since early 2022, however the short end of the curve has moved much faster and risen more than the 10-year treasury.
The U.S. economy continues its trend of stabilization as we move into May, with job growth remaining the strongest aspect of our nation’s economy.
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