U.S. Macro Outlook: Mild Recession ≠ Pleasant

CUSHMAN & WAKEFIELD RESEARCH U.S. Macro Outlook

UPSIDE SCENARIO*, 25% PROBABILITY

2020

2021

2022

2023

2024

2025

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

-2.8% -9,109

5.9%

1.9%

0.5% -528 -392 4.6% 2.0% 3.9% 4.6% 4.3% 6.1%

1.2% 594

2.2%

Nonfarm Employment

6,170 1,522

4,867 1,123

1,492

Office-using Employment

-1,131 6.8%

98

484

Unemployment Rate

4.2%

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

4.7% 3.7% 2.5% 3.2% 4.1% 5.7% $75.9

4.2% 3.6% 2.2% 2.8% 3.8% 5.3%

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

$87.7

$74.2

-75.7

-68.5

-37.1

-5.8 36.3

3.9

20.1 18.5

New Supply (msf)

51.9

58.6

49.0

25.8

Vacancy

14.8% 16.8%

18.2% -0.9%

18.5% -2.4%

18.9% 18.8%

Effective Rents

-7.3%

-5.7%

-0.1%

1.5%

Industrial Sector Net Absorption (msf)

297.5 361.9 5.0%

561.4 361.9

477.3 495.0

218.4 457.1

187.9 391.0

207.8 286.5

New Supply (msf)

Vacancy

3.4%

3.3%

4.6% 4.5%

5.7%

6.0% 2.1%

Effective Rents

6.0% 12.8%

20.5%

1.5%

Retail Sector Net Absorption (msf)

-24.6

36.0 10.2 6.5% 4.2%

40.9

16.9 14.1 5.5% 2.4%

6.7

29.0 14.1 5.3% 1.8%

New Supply (msf)

13.7

9.0

15.4

Vacancy

7.2% 1.4%

5.7% 4.7%

5.7% 1.8%

Effective Rents

Multifamily Sector Net Absorption (units, 000s)

303.0 349.1 4.4%

661.4 345.5

-104.3

228.0 485.6

184.7 291.1 7.3%

257.5 236.0

New Supply (units, 000s)

345.7

Vacancy

2.6%

4.9%

6.5% 4.1%

7.1%

Effective Rents

-0.8% 15.6%

8.9%

1.1%

2.0%

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 *This scenario is designed to incorporate the central tendency of a range of baseline forecasts produced by various institutions. Cushman & Wakefield Research views this scenario, often dubbed as a soft landing, as an “upside scenario” relative to our baseline scenario. The probability can be interpreted as the economy having a 25% chance of performing as well as or better than this scenario, and a 75% chance of performing worse.

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