Consumer Confidence Strong, Holiday Retail Sales Surge - Week of December 1st 2024

This is a weekly narration of our weekly Rent and Operating Trends Report.

Consumer confidence reaches a 16-month high

Based on a report from the Conference Board, consumer confidence improved in November to one of its highest levels in the last three years. An optimistic outlook on the labor market, a declining risk of a near-term recession, and expectations of lower inflation all contributed to the improvement. 

The cutoff date for the preliminary results was November 18, which means the outcome of the U.S. election on November 5 factored into many of the responses. While consumers generally believed inflation would head towards a lower rate, some economists warn that tariffs and other policies from the Trump administration could keep inflation at a higher rate.

Retail sales were strong to start the holiday shopping season

Spending by holiday shoppers last week echoed the improved consumer confidence reading. According to data from Adobe Analytics, consumers spent $10.8B on Black Friday this year, upfrom $9.8B the prior year. Thanksgiving Day also set a record with $6.1B in sales, up by 8.8% from the prior year.

Consumer spending represents approximately 70% of the U.S. economy, and this holiday season’s totals should bode well for GDP to close out the year. Consumer spending grew by a healthy 3.5% in Q3 2024 based on last week’s report from the Commerce Department. 

Job growth should bounce back in this week’s report

The Bureau of Labor Statistics will release its report on November’s employment growth for the U.S. on Friday. Last month’s report was the most dismal in a few years, but some special circumstances influenced the results. Hurricane impacts, worker strikes, and a shorter collection period weighed on the numbers. 

Forecasts for November’s job gain are in the 150,000 to 200,000 range. In October, only 12,000 jobs were added. An equally troubling note from last month’s report was that job growth for August and September was revised down by a combined 112,000 jobs. As mentioned, consumers remain optimistic about the labor market despite previous month’s results. 

Multifamily Highlights

Leasing activity continued to be steady in last week’s report, a trend that has been consistent since September. Multifamily operational benchmarks are displaying normal trends for this time of year, setting up for improved performance in many locations in 2025. 

Annual effective rent growth had a slight downtick and was at -0.3% in this week’s report, but it is still in much better shape than earlier in the year. Comparing average annual rent growth for November to the third quarter’s average, 31 of 45 markets showed improved performance. Of course, many markets still had negative annual growth, but most are headed in the right direction. 

Explore our webpage for more insights and resources:
https://bit.ly/Radix_Website

Explore our webpage for more insights and resources:
https://bit.ly/Radix_Website