Consumer Confidence

After sinking into the danger zone during July and August, the economy’s vital signs have improved over the past three months. Consumer confidence in November moved out of the recessionary range to its highest level since June according to the University of Michigan Consumer Sentiment Survey, although it remains well below its pre-recession highs.

Consumer Confidence (1966-Q1 = 100)

Other indicators including retail sales, GDP and various employment data also suggest that the economy dodged a recession. Dangers remain, however, chief among them the potential for tighter lending standards as banks brace for more bad news from Europe. Home prices continue to decline, and the labor market, while showing some improvement recently, is far from robust. For commercial real estate, the outlook is mixed. Low interest rates brought on by Federal Reserve policy and general economic weakness are helping to fuel investor demand, but the leasing market is generally sluggish with the exception of apartments, which have benefited from the foreclosure crisis and the soft housing market.