SAN DIEGO—“We are expecting solid US growth even though we are still in a world where growth is still relatively weak. We are at full employment. Inflation is up and increasing so we fully expect that the Fed will move three times this year and they will raise short term rates relatively rapidly. We are also seeing unbelievably favorable demographics.” Those thoughts came in the opening statement from Michael Fratantoni, chief economist and SVP of research and industry technology at Mortgage Bankers Association.
GlobeSt.com was in attendance on Sunday for MBA's CREF/Multifamily Housing Convention and Expo 2017 to hear the opening economic outlook session covering the latest information and insights about the economy and commercial and multifamily real estate finance markets—including the release of MBA's 2017 CREF forecast.
According to Fratantoni, we are post-election bounce in both stock market and rates. As for why we are stuck in 2% labor growth, he says that productivity has been very week with low investment playing a major role. “We still have some technological improvements needed.” For 2017, he expects an above trend growth, but it is a lot slower than what people are accustomed to. He adds that productivity growth has slowed just about everywhere. “It is a widespread international slowdown.”
In the policy conversation, Fratantoni said what is also important is that the rate of growth of trade globally has slowed down. “A lot of the discussion with the new administration in terms of a protectionist stance with the trade policy is something you will continue to hear,” he said. “There is a move away from the globalization trend that we had for the past few decades and people are questioning that.”
Looking closer at the US, in looking at recent manufacturing expansion, Fratatoni says it will feed a job market that is already strong. “In 2014, where there was still a sense that the recovery was lackluster, we had a fast rate of growth…a very rapid growth,” he says. “The US economy, given the slow labor force growth, only needs about 100,000 jobs per month to keep the unemployment stable.”
So what has happened to the unemployment rate? Fratantoni says it is edging lower and the labor force is stabilizing. Fratantoni added that age-adjusted labor force participation has been rising in recent years. There has also been a steady increase in recent wage growth, Fratantoni said.
He mentioned that inflation is picking up. “While gas and other energy sources are contributing to inflation, shelter prices are a big contributor to core inflation.”
Keep checking back with GlobeSt.com this week for all of our coverage live from the MBA's CREF/Multifamily Housing Convention and Expo 2017 event.
SAN DIEGO—“We are expecting solid US growth even though we are still in a world where growth is still relatively weak. We are at full employment. Inflation is up and increasing so we fully expect that the Fed will move three times this year and they will raise short term rates relatively rapidly. We are also seeing unbelievably favorable demographics.” Those thoughts came in the opening statement from Michael Fratantoni, chief economist and SVP of research and industry technology at Mortgage Bankers Association.
GlobeSt.com was in attendance on Sunday for MBA's CREF/Multifamily Housing Convention and Expo 2017 to hear the opening economic outlook session covering the latest information and insights about the economy and commercial and multifamily real estate finance markets—including the release of MBA's 2017 CREF forecast.
According to Fratantoni, we are post-election bounce in both stock market and rates. As for why we are stuck in 2% labor growth, he says that productivity has been very week with low investment playing a major role. “We still have some technological improvements needed.” For 2017, he expects an above trend growth, but it is a lot slower than what people are accustomed to. He adds that productivity growth has slowed just about everywhere. “It is a widespread international slowdown.”
In the policy conversation, Fratantoni said what is also important is that the rate of growth of trade globally has slowed down. “A lot of the discussion with the new administration in terms of a protectionist stance with the trade policy is something you will continue to hear,” he said. “There is a move away from the globalization trend that we had for the past few decades and people are questioning that.”
Looking closer at the US, in looking at recent manufacturing expansion, Fratatoni says it will feed a job market that is already strong. “In 2014, where there was still a sense that the recovery was lackluster, we had a fast rate of growth…a very rapid growth,” he says. “The US economy, given the slow labor force growth, only needs about 100,000 jobs per month to keep the unemployment stable.”
So what has happened to the unemployment rate? Fratantoni says it is edging lower and the labor force is stabilizing. Fratantoni added that age-adjusted labor force participation has been rising in recent years. There has also been a steady increase in recent wage growth, Fratantoni said.
He mentioned that inflation is picking up. “While gas and other energy sources are contributing to inflation, shelter prices are a big contributor to core inflation.”
Keep checking back with GlobeSt.com this week for all of our coverage live from the MBA's CREF/Multifamily Housing Convention and Expo 2017 event.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
