U.S. Macro Outlook: Mild Recession ≠ Pleasant

CUSHMAN & WAKEFIELD RESEARCH U.S. Macro Outlook

CUSHMAN & WAKEFIELD BASELINE SCENARIO*, 50% PROBABILITY

2020

2021

2022

2023

2024

2025

U.S. Economy Real GDP (AR, %)

-2.8% -9,109

5.9%

1.9%

-0.2%

1.3%

3.1%

Nonfarm Employment

6,170 1,522

4,867 1,123

-2,531

2,837

1,679

Office-using Employment

-1,131 6.8%

-816 5.8% 0.4% 3.3% 5.2% 4.3% 6.9%

565

532

Unemployment Rate

4.2%

3.7% 8.8% 7.3% 3.7% 3.8% 5.6%

4.6% 3.8% 2.0% 3.5% 3.9% 5.5% $66.1

4.0% 3.8% 2.2% 2.8% 3.6% 5.0%

Retail & Food Services Sales

4.1% 18.9%

CPI Inflation

1.2% 0.1% 0.9%

6.7% 0.1% 1.5% 2.4%

Federal Funds Rate

10-Year Treasury Rate BAA Corporate Bond West Texas Intermediate Office Sector Net Absorption (msf)

2.1%

$42.7

$77.2

$88.5

$75.8

$68.7

-75.7

-68.5

-37.1

-66.3

7.4

17.3

New Supply (msf)

51.9

58.6

49.0

36.3

23.7

8.3

Vacancy

14.8% 16.8%

18.2% -0.9%

19.8% -7.0%

20.0% 19.8%

Effective Rents

-7.3%

-5.7%

0.3%

2.2%

Industrial Sector Net Absorption (msf)

297.5 361.9 5.0%

561.4 361.9

477.3 495.0

193.0 433.9

155.4 387.8 5.9% 0.6%

235.7 290.9

New Supply (msf)

Vacancy

3.4%

3.3%

4.6% 4.3%

6.1% 2.8%

Effective Rents

6.0% 12.8%

20.5%

Retail Sector Net Absorption (msf)

-24.6

36.0 10.2 6.5% 4.2%

40.9

11.4 14.1 5.6% 2.4%

-7.6 14.9 6.1% 1.6%

24.7 13.1 5.8% 1.2%

New Supply (msf)

13.7

9.0

Vacancy

7.2% 1.4%

5.7% 4.7%

Effective Rents

Multifamily Sector Net Absorption (units, 000s)

303.0 349.1 4.4%

661.4 345.5

-104.3

190.8 485.6

187.4

264.4 220.7

New Supply (units, 000s)

345.7

289.6 7.5% 0.5%

Vacancy

2.6%

4.9%

6.7%

7.2%

Effective Rents

-0.8% 15.6%

8.9%

3.0%

0.9%

*The probability can be interpreted as the economy having a 50% chance of performing as well as or better than this scenario, and a 50% chance of performing worse.

Sources: U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, Federal Reserve, U.S. Census Bureau, Moody’s Investor Services, U.S. Energy Information Administration, CoStar, Axiometrics, Cushman & Wakefield Research

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