Economic Update - 12.30.22
Economic Update - 12.30.22

Featured topics:

  1. Q3 GDP & Consumer Spending Revised Up
  2. CRE Debt Climbs
  3. Local Governments and ARPA Spending
  4. Prologis 2023 Supply Chain Forecast
  5. Commercial Real Estate Prices
  6. Home Prices
  7. Independent Landlord Rental Performance
  8. Pending Home Sales
  9. PCE Inflation
  10. VTS Office Demand


• The Bureau of Economic Analysis reported an upward revision to Real GDP in the third quarter of 2022, mainly reflecting a revised total in U.S. consumer spending. The latest estimate shows a 3.2% annualized increase in Real GDP during Q3 2022, revised up from the previous estimate of 2.9% and a reversal from the 0.6% decline seen in Q2.

• Upward revisions occurred in consumer spending, nonresidential fixed investment, and state and local government spending. These revisions were partially offset by downward revisions seen in private inventory investment and exports.

• Both real incomes and spending are on the rise to close 2022. In November, personal income increased by $80.1 billion, or 0.4% annually, while personal consumption expenditures increased by $19.8 billion, or 0.1% annually.

• The spending-driven upward revision to growth is notable, given the ongoing analysis of the Federal Reserve’s interest rate policy, its impact on investment, and the debate around the potential for a U.S. recession. Outside of housing and other rate-sensitive products, consumers have largely shaken off the Fed’s rate hikes in their spending decisions. Historically, it is atypical for an economy to enter a recession while real incomes and spending are accelerating.