MDGLA

RETAIL SALES RESEARCH BRIEF: JANUARY 2023
Retail Real Estate Well-Positioned as Consumer Spending Begins to Plateau

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Slowing rate of inflation a welcome sign. Core retail sales in the last month of 2022 were up by 7.2 percent year-over-year. Despite a notable upward stretch, spending may be softening. December’s retail sales volume was a step back from recent months, a potential signal of the challenges facing consumers in the year ahead. While overall cash savings is some $4.4 trillion above the pre-pandemic mark, not every household was able to set aside funds. These opposing winds may create choppiness in the months ahead. A positive for both consumers and retailers alike, however, is that the softness in sales also contributed to a decline in the headline CPI figure last month. While prices on goods and services were still up 6.5 percent for the year, the pace is slowing.

EMPLOYMENT RESEARCH BRIEF: JANUARY 2023
Persistently Low Unemployment Brings Implications for Fed and CRE

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Job growth tapers slightly in December. Across the country, a net 223,000 jobs were created in December, pushing the unemployment rate back down to 3.5 percent. While still above the 2000-2019 average, monthly hiring has been trending down since July of this year. Staff additions last month were most prevalent in the leisure and hospitality sector, as well as in health care and construction. Payroll changes in other industries were modest. While joblessness remains low, the concentration of employment growth in only select fields that are either still in recovery or face acute labor shortages may foreshadow a sharper slowdown in job creation to come. This has important implications for Federal Reserve monetary policy, and by extension, the performance of financial markets and commercial properties.