A great debate rages over whether the U.S. economy is in recession -- is growth slightly negative or just plain minuscule? On the ground, does it really matter? Larry Lindsey, President Bush's former economic adviser, said in a presentation I attended a few years ago that growth in the 1.5% to 2% range feels like recession whether or not it technically is. This week's release of Fed minutes underscores the reserve bankers are not particularly optimistic, expecting higher unemployment and more inflation, fed by high energy prices. Stock market analysts sound more optimistic, playing up opportunities in companies operating in global markets where growth is better. Indeed many multinationals may produce better bottom line results from overseas operations that help stock prices, but as an Emerging Trends interviewee said to me last summer that doesn't necessarily boost jobs back home. And if you operate a domestic focused business, "you're not going to feel real good," he said. How prescient he was.
In the past few days I got a couple of calls from friends who run US-based businesses. They are getting squeezed by rising fuel and material costs and reduced demand for their services. Both rein in spending in their businesses and for their families, while their anxiety levels head off the charts. And $5 gas seems like a real possibility before the end of summer.
In the short term -- shopping centers and hotels are in the crosshairs; consumers cut back to essentials and vacationers stay close to home. Businesses start to reduce travel. And who wants to pay to check bags on the airlines?
Let the economists and number crunchers debate all they want -- the "feel good" index is in the dumps with more room to drop.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
