U.S. Macro Forecast 2012-Tap It Up, Cautiously

We at Cassidy Turley have just released our U.S. Macro Forecast for 2012 and our outlook is tentatively optimistic. To read the full report, click the report image.

Cassidy Turley Overview

Four main points given in the forecast include:

* Economic data has suprisingly been consistently positive.
* Job creation is accelerating. For growing companies, hiring has moved from an option to a must as productivity levels have peaked and are beginning to drop. See our U.S. Employment Tracker for more info.
* Euro-zone policy, uncertainty in the oil markets and ambiguity in our own internal U.S. policy remain possible game changers. Please see our Euro-Crisis White Paper for the latest nuances of that situation. 
* Assuming minimal shocks to the fragile economy, the commercial real estate recovery will accelerate in 2012.

What I’m Seeing In The Market

• The “double-dip” rhetoric appears to be behind us but given the last couple of years, we are all well aware of the risks that still remain.
• It appears that businesses have indeed reached their tipping point and are starting to hire.  More jobs will equal lower vacancy as our report suggests.
• We also project that interest rates will rise.  The correlation between interest rates and inflation produces a projection that office rents will rise 50 cents for every 75-100 basis point increase in long-term Treasury yields.
• I am presently seeing the Class A buildings start to fill up and raise their rents.  This relieves pressure on Class B and allows those landlords to hold firm on rates and begin to increase them as well.  Expect this to continue throughout the year.
• I am also seeing sales activity pick up.  I believe we are at the bottom of the cycle and will see values and activity continue to rise throughout the year.  Our report indicates this and says that most investment sales will stay in the core to core plus properties.