JLL’s Chief Economist shares his view on today’s U.S. economy and its impact on Phoenix

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JLL Chief Economist Ryan Severino recently visited Phoenix to present his views on today’s U.S. economy and the impact national conditions may have on the Phoenix commercial real estate market. Here are his top 4 takeaways.

1.Goldilocks economy should continue, with the potential for upside depending upon policy.

Global growth continues to accelerate as major economies in Europe and emerging markets grow together. As a result, the global economy is set to rebound from the 2016 lull.

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Nationally, there hasn’t been an acceleration in real GDP growth because there have not been any major operational changes in the economy. Infrastructure spending, tax cuts and deregulation are hot topics of discussion but so far no policies have been executed by the new administration.

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2.The Fed is expected to hike rates one more time in 2017 and begin to unwind its balance sheet.

Interest rates are headed upward but remain low by historical standards.

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The misconception is that higher interest rates are bad for the stock market but the reality is, markets have historically performed better when interest rates have increased.

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3. Growth in Phoenix should continue to outperform the U.S. overall.

Phoenix’s economy is currently outperforming the overall U.S. economy due to a variety of factors. Those of significance include:

  • Low cost of living and doing business
  • High population growth and in-migration
  • Impressive job growth
  • Increase in young, educated labor force
  • Strong performing apartment market

4. Recession risk is low for the next 12-18 months, but starts to increase in 2019.

The sole increase of interest rates is not incredibly impactful to the economy, but the cumulative effects of the increase can be. The highest risk for recession is around the years of 2019 to 2021.


Learn more

Read Ryan’s Weekly Economic Insight reports to learn more about the economy.

Download our Q3 Insight reports to learn more about the performance of the office and industrial markets in Metro Phoenix:

Office Insight

Industrial Insight


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