--- title: Weekly Economic and Commercial Real Estate Update November 2nd description: We’ve entered an interesting phase of the recovery. With massive government stimulus over the past 18 months and the Fed likely announcing the taper of asset purchases this week due to inflation concerns, the recovery will be tested. Can spending remain healthy without stimulus checks, enhanced unemployment benefits, and the Fed pulling back on flooding the financial system with cash? Can the recovery continue in the face of inflation pressures? The training wheels supporting the economy are clearly coming off. image: https://blog.keyser.com/hubfs/Weekly-Economic-and-Commercial-Real-Estate-Update-November-2nd.jpg --- [Commercial Real Estate](https://blog.keyser.com/topic/commercial-real-estate) , [Capital Markets](https://blog.keyser.com/topic/capital-markets) , [The Economy](https://blog.keyser.com/topic/the-economy) # Weekly Economic and Commercial Real Estate Update November 2nd [By Brian Uretzky](https://blog.keyser.com/author/brian-uretzky) November 02, 2021 - [** ](https://twitter.com/intent/tweet?url={url}&text={title}) - [** ](https://www.linkedin.com/shareArticle?mini=true&url={url}&title={title}) - [** ](https://www.facebook.com/sharer.php?u={url}) We’ve entered an interesting phase of the recovery. With massive government stimulus over the past 18 months and the Fed likely announcing the taper of asset purchases this week due to inflation concerns, the recovery will be tested. Can spending remain healthy without stimulus checks and enhanced unemployment benefits, and the Fed pulling back on flooding the financial system with cash? Can the recovery continue in the face of inflation pressures? The training wheels supporting the economy are clearly coming off. By examining October's spending data, it’s reasonable to question how strong spending will be over the next 12 months, but spending trends don’t seem to be generating too many alarm bells at the moment. Instead, much of the commentary surrounding October’s economic data focused on a tight labor market, elevated inflation levels, and weaker confidence in the economy. The following three charts may best visualize this sentiment:   ##### Tight Labor Market: Job openings remain near historic highs ![Economic_Outlook_11-2-21](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21.png?width=702&name=Economic_Outlook_11-2-21.png)   ##### Elevated Price Pressures: Inflation remains at its highest level since the early 1990s *![Economic_Outlook_11-2-21-2](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21-2.png?width=2178&name=Economic_Outlook_11-2-21-2.png)* ##### Weaker Confidence: Consumer sentiment (University of Michigan data) has fallen to near-decade lows, partially due to inflation concerns *![Economic_Outlook_11-2-21-3](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21-3.png?width=2160&name=Economic_Outlook_11-2-21-3.png)* With regard to October's spending data, much of the commentary remains positive, evidenced by Retail Sales remaining well above its pre-COVID trend:   ![Economic_Outlook_11-2-21-4](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21-4.png?width=2186&name=Economic_Outlook_11-2-21-4.png)   However, when you look at October's Personal Consumption Expenditures data, you see some trends that don’t look so promising. Income and Savings which have driven healthy spending levels, seem to be starting to fall below their pre-COVID trends.   ![Economic_Outlook_11-2-21-5](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21-5.png?width=2184&name=Economic_Outlook_11-2-21-5.png)   ![Economic_Outlook_11-2-21-6](https://blog.keyser.com/hs-fs/hubfs/Economic_Outlook_11-2-21-6.png?width=2180&name=Economic_Outlook_11-2-21-6.png)   This is a concern because many of the strong Income and Savings numbers throughout COVID were a direct result of stimulus efforts such as enhanced unemployment benefits and stimulus checks. Without these benefits, what happens to spending? Additionally, how does spending respond to rising prices for goods and services, particularly if it leads to the Fed removing accommodation more aggressively?   Keep an eye on personal Income and Savings over the next few months. Without substantial stimulus, these charts need to show stability for the recovery to continue in a healthy manner. [All posts](https://blog.keyser.com) [Brian Uretzky](https://blog.keyser.com/author/brian-uretzky) Brian has 20 years of experience in finance and commercial real estate. Prior to joining Keyser as the new head of Keyser’s Capital Markets Practice, Brian worked at a 250 billion dollar investment manager in Boston. He was the senior trader for Commercial Mortgaged Backed Securities (CMBS), helping to manage a five billion dollar portfolio of CMBS across hundreds of client accounts. [** ](https://keyserco.com/our-team/brian-uretzky/) ##### You might also like ![How California Closets Found the Right Space for Growth](https://blog.keyser.com/hubfs/AdobeStock_1322531871.jpeg) [How California Closets Found the Right Space for Growth](https://blog.keyser.com/how-california-closets-found-the-right-space-for-growth) November 02, 2021 ![Shell vs Turnkey Space: Which Option Is Right for Your Business?](https://blog.keyser.com/hubfs/AdobeStock_1481803663.jpeg) [Shell vs Turnkey Space: Which Option Is Right for Your Business?](https://blog.keyser.com/shell-vs-turnkey-space-which-option-is-right-for-your-business) November 02, 2021 ![How Executives Should Use AI in CRE](https://blog.keyser.com/hubfs/AI%20in%20CRE_3.png) [How Executives Should Use AI in CRE](https://blog.keyser.com/how-executives-should-use-ai-in-cre) November 02, 2021 [![](https://keyser.com/wp-content/uploads/2023/01/cropped-LogoBug-RGB.png)](https://keyser.com/) **Designated Broker **Jonathan Keyser **License Number **KEYSER, LLC LC646225000 [**Privacy Policy**](https://keyser.com/commercial-real-estate/privacy-policy/) SERVICES [**Commercial Real Estate**](https://keyser.com/commercial-real-estate/) [**Business Advisory Services**](https://keyser.com/business-advisory-services/) ABOUT US [**Our Team**](https://keyser.com/our-team/) [**Our Culture**](https://keyser.com/selfless-service-culture/) [**Join The Team**](https://keyser.com/join-the-movement/) RESOURCE CENTER [**Blog**](https://blog.keyser.com/) [**Featured In**](https://keyser.com/featured-in/) LOCATIONS **Keyser World Headquarters **6400 E. 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