Retail has generally seemed to hold out through many of the trials facing CRE, in general. Right now, some data from Newmark might leave you confused about what is happening now.

First is current economic conditions. As the firm noted, consumer wage growth is outpacing inflation. In the November jobs report, average hourly earnings were up 4% year over year. The Consumer Price Index in October, though, experienced 3.3% year-over-year growth. But an average view doesn’t get to the core of distribution.

Consumer confidence remains subdued, as Newmark said. Here’s why. Wages have been growing about 10% faster than inflation at the 75th percentile. At the median, it’s slightly below CPI. And at the 25th percentile, it’s about a 5% annual loss, according to data from the Federal Reserve Bank of Atlanta. There may not be enough people at the top to keep the GDP, which is 69% consumer spending, as strong as it has been. Retail sales growth has continued to be positive but for a year it’s been below 5%, which was largely the pattern between 2012 up to the end of 2019. Newmark did point out that the continued strength was “particularly notable” given how much fuel prices, which are counted in the retail mix, had fallen since a 2022 peak.