The U.S. economy continues to chug along. Standard economic metrics are showing solid gains. The Bureau of Economic Analysis recently reported that real GDP increased at an annual rate of 2.3 percent in the second quarter of 2015. The Labor Department reported the U.S. economy added 215,000 jobs in July, a respectable gain that helped the unemployment rate hold steady at 5.3 percent. And consumer spending, accounting for 70 percent of U.S. economic activity, expanded at an annual rate of 2.9 percent during the second quarter.
In addition to consumer spending, another encouraging sign has been the recent ramp-up in housing construction, which has nearly returned to pre-recessionary levels (although multifamily projects are fueling this growth). Other trends indicate that consumers are back on solid ground, and their improved outlook and spending are fueling the economy’s resurgence from the depths of the global financial crisis.
New car sales, for example, totaled 16.5 million last year. In 2010, the total was 11.6 million. And luxury car manufacturers such as BMW, Porsche, Mercedes-Benz and Audi all reported record sales in 2014.
The number of vacation properties purchased in the United States totaled more than 1.1 million in 2014, according to the National Association of Realtors. In 2010, the total was 469,000.
Household debt has fallen to its lowest level since mid-2006. And there are indications that income growth is picking up. All good signs that consumers will open their wallets and help the economy gain traction in the months ahead. Of course, when the Fed finally decides to bump up interest rates — whether it is in September, December or 2016 — everyone will be watching the effects on the equity markets and consumers.
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Larry Gray is editorial director of Institutional Real Estate, Inc.
