National Apartment Occupancy Rates Stabilize, Rent Growth Slows

Real Estate Investing

Apartment rents are still growing across the country, but not as quickly as they were in the summer of 2011, when growth in effective rents peaked.

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“Things have slowed since a year ago,” says Jay Denton, vice president of research for data firm Axiometrics Inc., based in Salt Lake City. “The growth rate has slowed for rents… The growth for occupancies is starting to flatten out.”

Axiometrics predicts that average apartment rents will settle into a steady pace of growth over the next few years, similar to rental markets in the mid-1990s, as occupancy rates stay very high.

The percentage of occupied apartments appears to be settling in at close to 95 percent. The national occupancy rate actually dropped very slightly in July, inching downwards 3 basis points to 94.33 percent from 94.36 percent in June. Occupancies are still up 71 basis points from 93.62 percent the year before, according to Axiometrics, which bases its numbers on monthly surveys of 5.5 million apartments in more than 140 metropolitan areas across the country.

Data from Reis Inc., based in New York City, also show the balance stabilizing between occupied and vacant apartments. Reis’s count of the percentage of vacant apartments fell to 4.7 percent in the second quarter, from 4.9 percent in the first quarter. “A 20 basis point drop is, after all, the smallest quarterly decline in national vacancies in two years,” according to Victor Canalog, vice president of research and economics for Reis.

Continued economic uncertainty is helping to restrain further growth in occupancy rates. Also a growing number of property managers now use revenue management systems to help set their rents. Many computerized systems automatically begin to push rents higher on renewal once the occupancy rate at an apartment community reaches about 95 percent. That tends to make the occupancy rate more predictable in tight apartment markets. “You can almost for the revenue managed properties pencil in 95 percent and you would be correct,” says Denton.

The occupancy rate for class-A and class-B properties has been at roughly 95 percent for the last year. Class-C properties have been catching up, and are now at a little less than 90 percent occupied on average across the U.S., says Denton.

Rent growth slows

Annual effective rent growth slowed from 3.83 percent in June to 3.73 percent in July, according to Axiometrics. That’s the lowest year-over-year growth since August 2010. Rent growth peaked last July at annual rate of 5.32 percent, but it has been close to an annual rate of 4.0 percent the past nine months due primarily to the under-performance in August, September and November last year.

Rent growth at 4 percent is difficult to maintain year after year, especially when for-sale housing is relatively cheap and job growth is weak. “Typically, when housing is very affordable, rent growth is not strong,” says Denton.

Weak employment can also hold rents back. “A weaker pace of job growth implies temporary near-term moderation in the magnitude of rent increases,” according to John Chang, vice president of research services at Marcus & Millichap. In the strongest markets, where rents have grown faster than the national average, “renters have displayed increased sensitivity to strong rent hikes,” says Chang.

However you slice it, rents are rising faster than inflation overall. The Consumer Price Index has grown at a rate of less than 2 percent a year this summer and grown less than 3 percent a year since the financial crisis.

New construction

The rate of new deliveries is accelerating. Developers will open 87,000 new apartments in 2012, with nearly two-thirds of them opening in the second half of the year. Approximately 129,000 units are going online in 2013, according to Axiometrics.

That may sound like a lot—but over the decade before the crash, the construction of apartment developers consistently finished roughly 300,000 new units a year. “We’re not even where we were from 1997 to 2008,” says Denton.

Apartment developers have bold plans for the future, but those plans are still taking shape. “We are tracking 800,000 units in planning not yet under construction,” says Denton. But the number is less impressive, considering that an apartment property can take years to plan and build—especially in the infill, high-barrier-to-entry locations that many developers now favor.

The constrained supply of new apartments should help keep the markets relatively stable. Barring some unexpected shock to the economy, the apartments markets will continue to be tight for the foreseeable future.

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Obama Vs. Romney: 2012 Election Winner Determines Which Stocks Survive in 2013

With Election Day just over two months away, the Republican National Convention taking place this week, and the Democratic National Convention on docket for next week, the presidential race is now in full-throttle gear. Perhaps you’re wondering if and how the 2012 presidential election could affect the stock market.

Will it matter who wins? Are there specific industries or stocks that are likely to benefit if the President is reelected? How about if Romney is the victor?

Presidential Election Investment Theories Abound

There is a plethora of presidential election investment theories. Some are quite well supported by facts, others are myths, and many fall somewhere in between. Thus, it’s important to be skeptical about what you read on this topic.

There is just one certainty: There is NO sure thing about how this – or any – presidential election will affect the stock market.

Presidential Election Cycle Trend: Third & Fourth Years are the Charms

Before we drill down to the Obama vs. Romney win level, it’s important to be aware of the Presidential Cycle Trend, as it has a very strong track record. It suggests that the year of a presidential term is a more important factor for overall stock market performance than whether a Democrat or Republican occupies the White House.

The nutshell of this trend:  The U.S. stock market — and economy — tend to perform much better in the last two years of a president’s term than they do in the first two years.

This theory predicts 2013 will be a tough year for the stock market regardless of which candidate wins. However, even in flat or poor overall markets, there will always be some winning stocks, and likely some winning industries.

How the 2012 Presidential Election Could Affect the Stock Market

Bank of America equity analysts put together a report called Election 2012, which looks at the industries and individual stocks that could benefit most under both scenarios, a President Obama reelection or a Romney win. I’ve selected three sectors for each scenario — those with the strongest rationales — to highlight here.

My personal opinion is it’s generally best to place little overall weight on politics when investing, especially for the long-term. Stocks with strong fundamentals will usually perform well over the long-term, regardless of the shorter-term power fluctuations in the White House and Congress.

If Obama is Reelected

1. Life Sciences & Diagnostic Tools

Rationale: Democrats are generally viewed as being more generous when it comes to R&D funding. However, if the President is reelected but Republicans take control of Congress, the outlook could be negative for life sciences stocks as politicians lock horns over budget matters.

Some Stocks in Industry: Illumina (ILMN), Thermo Fisher (TMO), Life Tech (LIFE)

2. Pharmaceutical Distributors

Rationale: Progress on health care reform would benefit pharmaceutical companies who would experience an increase in sales to the newly insured. However, the positives from reform could be offset by deficit reduction effects. Therefore, the BofA report recommends investors should focus on pharmaceutical distributors, since they are not tied directly to government reimbursements.

Some Stocks in Industry: Amerisource (ABC), McKesson Corp (MCK), Cardinal Health (CAH)

3. Alternative Energy (AE)

Rationale: AE will likely benefit from an Obama reelection in two ways. First, stricter environmental requirements for businesses hurt the coal industry, so support AE.  The second is related to renewable tax credits. Obama supports the extension of the wind production tax credit, while Romney is leaning against it. An extension would be a positive for large renewable generators.

Some Stocks in Industry: NextEra Energy (NEE), Exelon Corp (EXC)

If Romney is Elected

1. Medical Supplies and Devices

Rationale:  According to the BofA report, a Romney win would more likely result in a more favorable (lenient) FDA and the increased likelihood that the Medical Device Tax would be repealed or modified.

Some Stocks in Industry: Stryker Corp (SYK), Medtronic (MDT), Zimmer (ZMH), St Jude Medical (STJ), Covidien (COV)

2. Managed Care

Rationale: If Romney wins and Republicans take control of Congress, they would likely work on repealing the President’s health care reform program. It’s widely believed they would eliminate incentives for moving health insurance enrollment to exchanges, and this would prevent the profit margin compression for health insurance companies currently providing Medicare.

Some Stocks in Industry: Humana (HUM), WellPoint (WLP), Coventry Health (CVH)

3. Transportation

Rationale: A Romney win would likely signal a softening on regulation in both the rail and trucking industries.

Some Stocks in Industry: CSX Corp (CSX), CP Rail (CP), Knight Transportation (KNX)

12 Signs That The Next Recession In The United States Has Already Begun


Is the U.S. economy in a recession right now?  Has the next recession in the United States already begun?  Unfortunately, there are a lot of economic numbers that are pointing in that direction.  U.S. retail sales have fallen for three months in a row, U.S. manufacturing activity is contracting and there are numerous indications that the labor market is getting weaker.

Of course there are some economists that will argue that we never even left the last recession.  For example, the percentage of working age Americans with jobs fell from above 63 percent in 2007 to under 59 percent during the last recession.  Since the end of the last recession, that number has not gotten back above 59 percent.  In fact, it has been below 59 percent for 34 months in a row.

In addition, we have continued to see poverty and government dependence steadily rise during this “economic recovery”.  Since Barack Obama became president, the number of Americans living in poverty has risen by 6 million and the number of Americans on food stamps has risen by 14 million.

So it would be really hard to argue with anyone that wants to say that the last recession never really ended.  However, the latest economic numbers indicate that things are about to get even worse for the U.S. economy, and that is not good news at all.

The following are 12 signs that the next recession in the United States has already begun….

#1 U.S. retail sales have declined for three months in a row, and that is a very bad sign.  Retail sales in America have fallen three months in a row only 27 times since 1947.  In 25 of those instances, the U.S. economy was either “in a recession or within three months of a recession.”

#2 Manufacturing activity in the mid-Atlantic region has declined for three months in a row.

#3 Overall, the U.S. manufacturing sector contracted last month for the first time in almost three years.  The following is from a recent article in the Los Angeles Times….

A factory index calculated by the Institute for Supply Management slid to 49.7 in June from 53.5 in May to the lowest reading since July 2009. Any level below 50 denotes tightening in the sector; anything above signifies growth.

#4 Sales of previously occupied homes dropped by 5.4 percent during June.

#5 Initial claims for unemployment benefits rose to 386,000 last week – another sign that the labor market is weakening again.

#6 According to one survey, only 23 percent of all U.S. businesses plan to hire more workers over the next 6 months.

#7 The Philadelphia Fed’s employment index indicates that there is bad news ahead for the labor market….

Labor market conditions at the reporting firms deteriorated this month. The current employment index decreased 10 points, to ‐8.4, its second negative reading in three months. The percent of firms reporting decreases in employment (18 percent) exceeded the percent reporting increases (10 percent).

#8 Unless Congress acts, the U.S. Postal Service is going to financially default for the first time ever on August 1st.

#9 The Conference Board’s index of leading economic indicators fell by 0.3 percent in June.

#10 A Washington Post survey that was conducted back in April discovered that 76 percent of all Americans believe that the U.S. economy is still in a recession.

#11 According to AARP, 600,000 American homeowners that are 50 years of age or older are currently in foreclosure.

#12 The unemployment rate in New York City is now back up to 10 percent.  That equals the peak unemployment rate in New York City during the last recession.

US Gas Prices, Oil Price & the Real Story

US Gas Prices, Oil Price & the Real Story

You know the story. When Obama took office:

Gasoline cost $1.95/gallon and oil, $45

Now Gasoline costs $3.72/gallon and oil, $125

Incredible. And we understand—because our politicians explained it to us, like so …

1.We should’ve drilled.

2.But Obama and his EPA stopped us.

3.So the supply of oil went down.

And, that pushes the price up, and high oil prices cause high gas prices. If we had drilled, supply would be up and the price would be down. Maybe down to $1.00/gal like under Clinton (March 1999).

National Jobs Report Winston Rowe & Associates

Employment in the U.S. nonfarm private business sector increased by 163,000 from June to July on a seasonally adjusted basis. The estimated gain from May to June was revised down slightly, from the initial estimate of 176,000 to a revised estimate of 172,000. Employment in the private, service-providing sector expanded 148,000 in July after rising a revised 151,000 in June. The private, goods-producing sector added 15,000 jobs in July. Manufacturing employment rose 6,000 this month, following a revised increase of 9,000 in June.

Federal Reserve Chairman Ben Bernanke

As the AP reads it, Federal Reserve Chairman Ben Bernanke stopped just short of “committing the Fed to any specific move, such as another round of bond purchases to lower long-term interest rates.” Bernanke gave a speech at the Federal Reserve Bank of Kansas City Economic Symposium in Jackson Hole, Wy. today. As with all his speeches, it was being closely watched for signs on what the Federal Reserve would do next. With the unemployment rate stagnant, would the Fed unleash further stimulus? Or would the relative good news on the consumer spending and housing fronts we’ve gotten in recent weeks be enough to stave off new action

National Medical Building Financing No Upfront Fees Winston Rowe & Associates

Winston Rowe & Associates provides a diverse innovative Medical Complex lending platform provides Medical complex loans from $1,000,000 to $50+ million dollars.

For more information about Winston Rowe & Associates medical building loan programs, they can be contacted at 248-246-2243 or visit them online at

Winston Rowe & Associates specializes in arranging financing around the United States for Medical Office Developments, Medical Facilities of almost every description and Medical Research & Development Buildings.

Winston Rowe & Associates can also arrange quick close private financing, including bridge loan for all types of Medical office and commercial office properties with emphasis on speed.

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Recognizing that people and relationships drive this business, they are affiliated with some of the industry’s most committed commercial finance professionals.

Investment Activity in Hotels is Set to Surge

Through the first five months of the year, the pace of hotel transactions has been steady and strong, but not spectacular. That could soon change.

 “There was an expectation that assets would be dumped on the market,” said Art Adler, Jones Lang LaSalle Hotels’ managing director and CEO of the Americas, during the NYU International Hospitality Industry Investment Conference in June. “Lenders are more disciplined now. A great deleveraging is coming in the next five years. There will be epic transaction volume … More mega deals are coming this year.”


Jones Lang LaSalle Hotels, which tracks transactions $10 million and up, reports U.S. deal volume reached $5.1 billion through May. The five-month mark is off last year’s total of $6.4 billion. The number does not include the $1.9 billion Blackstone purchase of Motel 6 as that hasn’t closed yet. Nor does it count note sales, foreclosures or other loan-to-own recapitalizations that would increase the transaction volume by 50 percent, estimated Larry Wolfe, Eastdil Secured’s senior managing director. If those transactions were counted, lodging’s deal volume would be at 2005 or 2006 levels, he said during the panel with Adler.


Despite an uneven economic recovery in the U.S. and continued concerns over Europe, operating performance continues to improve. Supply growth is at historic lows, while demand reaches new highs. Revenue per available room will climb 5.5 percent this year and another 5.4 percent next year, according to STR Chairman Randy Smith. And in 18 months, RevPAR will reach 2007 peak levels.


Steve Rushmore, HVS founder, followed Smith on stage and called today’s lodging environment the “best hotel buying opportunity in the U.S. since 1991.” After falling 31 percent in 2009, hotel values have risen 17 percent in 2010, 20 percent last year and HVS projects 17 percent increases this year and the next. For that reason, Rushmore believes single-asset transactions will be down this year while owners hold their assets to take advantage of the rise in values.


Still, a panel of leading hotel REIT executives said they would be net buyers this year, while a panel of the leading private equity players sent the same message. REITs accounted for 44 percent of the transaction volume through the first half of 2011, but only 27 percent this year. Private equity has accounted for 52 percent of the deals so far this year, but REIT activity is expected to pick up, saidAdler. This will bring even more assets to market.


Host Hotels & Resorts CEO Ed Walter said his firm would like to be a seller, and has been in some markets, but “it’s still a great time to buy and we’ll be a net buyer.” Dan Hansen, CEO of Summit Hotel Properties; Ken Cruse, CEO of Sunstone Hotel Investors; Gary Mendell, CEO of HEI Hotels & Resorts; and Mit Shah, CEO of Noble Investment Group, all concurred with that sentiment during a panel discussion about mergers and acquisitions.


The panelists all expressed concern over the economy and Europe, but as Hansen said, “the runway looks good and we’ll proceed with a measured pace.”


Another factor in the expected surge of transactions is the recovering and “maturing debt market,” noted Mark Elliott, senior managing director of Hodges Ward Elliott. He said all traditional debt sources, from CMBS to banks to insurance companies, are active. The terms, spreads and cost of debt may not be what they were a few years ago, but financing is available.


The tidal wave of distressed deals hasn’t yet arrived, and may not, because it’s been “a more orderly recapitalization” than anyone expected, said Wolfe. Elliott added that extend and pretend has proven to work in many cases: “People aren’t panicking.”


If Jones Lang LaSalle Hotels’ forecast of $15 billion in hotel transactions this year is to happen, that means close to another $10 billion in deals is still to come.


“Based on the pace recorded thus far, the firm remains confident that the transaction volume forecast of up to $15 billion will be met as momentum in the market further accelerates,” Adler said.


Free Commercial Real Estate Investors Library
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Winston Rowe & Associates, a no upfront or advance fee CRE private capital and private equity firm has developed the following knowledge based news articles to assist commercial real estate investors.

1.Guide To Buying Hotels
2.Commercial Loan Underwriting & Due Diligence
3.How To Finance Assisted Living Facilities
4.Financing Special Purpose Properties
5.What Is Private Equity
6.Hard Money Loans Explained
7.SBA Loan Explained
8.SBA Loan Fundamentals
9.Investing In ALF
10.Commercial Loan Check List
11.Investment Guide For Apartment Buildings
12.How Bridge Loans Work
13.Commercial Real Estate Investment Strategies
14.Qualifying For A Commercial Loan
15.Debtor in Possession Chapter 11 Loans Explained
16.Debtor In Possession Definition
17.Basics of Commercial Loan Due Diligence
18.Refinancing a Commercial Loan
19.Why Banks Are Not Lending
20.Apartment Building Investing
21.Investing in Apartments vs Single Family Homes
22.Investing in Office Buildings
23.Guide For Investing in Apartment Buildings
24.Commercial Real Estate Investing
25.How to Buy an Office Building
26.Joint Venture Capital
27.National Real Estate Investments Improving
28.Equity Financing & Venture Capital Explained
29.CRE Outlook Improving
30.Loan to Cost & Loan To Value Explained
31.Credit Crunch Has CRE Investors Turning to Private Capital
32.Commercial Mortgage Types
33.Protecting The US Economy
34.How to Apply for Hard Money
35.Investment Options For Apartment Buildings
36.Apartment Buildings Best Investment For 2012 & 2013
37.Free Commercial Real Estate Listings & Investing Resources
38.US Federal Reserve To Aid Global Markets
39.Commercial Loan Terms
40.Commercial Real Estate Free Listings & Market Research
Commercial real estate investing links.

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USA Bio Fuel Causing Global Food Price Volatility A Growing Concern

Given the exceptional drought in the US, current crop conditions in other grain producing regions, and the resulting increase in international food prices, the World Bank today expressed concern for the impacts of this volatility on the world’s poor, who are highly vulnerable to increases in food prices.

 “When food prices rise sharply, families cope by pulling their kids out of school and eating cheaper, less nutritious food, which can have catastrophic life-long effects on the social, physical, and mental well being of millions of young people,” said World Bank Group President Jim Yong Kim.  “The World Bank and our partners are monitoring this situation closely so we can help governments put policies in place to help people better cope.”

 “In the short-term, measures such as school feeding programs, conditional cash transfers, and food-for-work programs can help to ease pressure on the poor,” continued Kim. “In the medium- to long-term, the world needs strong and stable policies and sustained investments in agriculture in poor countries.  We cannot allow short-term food-price spikes to have damaging long-term consequences for the world’s most poor and vulnerable.”

 Thus far, crop projections do not indicate the potential for actual shortages in the major grains; however, stocks are low, and the harvests will continue to be dependent upon global weather, which leaves prices more vulnerable to higher volatility.   

 Food price volatility creates unpredictability in the market and poses fundamental food security risks for consumers and governments.  Volatility also discourages needed investment in agriculture for development due to increased financial risks and uncertainty for producers and traders.

 While the prices of many food staples have risen sharply, the Bank noted that the current conditions differ from the 2008 crisis.  In 2008, while other grains increased in price, rice and wheat prices rose the most, although the price fell quite substantially in 2009 due to a notable supply response by farmers seeking to benefit from higher prices. In 2012, prices have risen across all the non-rice grains – wheat, corn and soybeans:

 •Wheat prices are up over 50 percent since mid-June;

•The price for corn has risen more than 45 percent since mid-June; and

•Soybeans are up almost 30 percent since the beginning of June and up almost 60 percent since the end of last year.

As recently as early June, analysts had expected price declines after the new harvests, not spikes. There had been early planting of corn and some soybeans in the United States, and the disastrous drought was unpredictable at that stage.  Price increases will affect not only bread and processed food, but also animal feed and ultimately the price of the meat.

 In 2008, the price of rice more than tripled, which had a huge negative impact on the poor, especially in Asia.  Although current rice prices remain at elevated levels, existing rice stocks are relatively comfortable.  In addition, current prices of crude oil, fertilizers and international freight are at lower levels than in 2008, which will both ease the costs of importing food, and also the sowing and growing of next season’s crop.

 The impact of the U.S. drought on global markets is exacerbated by other countries also currently suffering from weather-related production issues. Almost continuous rain is causing problems for the wheat crop in many European countries, whereas the wheat crops in Russia, Ukraine and Kazakhstan have been hit hard by a lack of rain.  In India, monsoon rainfall is about 20 percent below the long-term annual average. July is the critical planting month and there may be major negative implications if rains do not pick up. 

 Should the current situation escalate, the World Bank Group stands ready to assist client countries through measures such as increased agriculture and agriculture-related investment, policy advice, fast-track financing, the multi-donor Global Agriculture and Food Security Program, and risk management products. We are also coordinating with UN agencies through the High-Level Task Force on the Global Food Security Crisis and with non-governmental organizations, as well as supporting the Partnership for Agricultural Market Information System (AMIS) to improve food market transparency and to help governments make informed responses to global food price spikes. 

 The World Bank has long cautioned that we can expect to see volatile, higher than average grain prices until at least 2015.  In the poorest countries, where people spend up to two-thirds of their daily income on food, rising prices are a threat to global growth and social stability. However, higher prices can bring desperately needed income to poor farmers, enabling them to invest, increase their production and thereby become part of the global food security solution.

 There are nearly one billion hungry people worldwide. More than 60 percent of the world’s hungry are women. Malnutrition contributes to infant, child and maternal illness; decreased learning capacity; lower productivity and higher mortality. One-third of all child deaths globally are attributed to under-nutrition, and up to 80 percent of our brain architecture develops during the first 1,000 days of life, making access to nutritious food critical, particularly for young children.

 How the World Bank is helping

 •In FY12, which ended June 30, new Bank Group commitments to agriculture and related sectors reached over $9 billion.  This exceeded projected lending in the Bank’s Agriculture Action Plan, which foresaw an increase from an average of $4.1 billion annually in FY06-08 to $6.2-$8.3 billion annually in FY10-12. IBRD/IDA assistance in FY12 was the highest in 20 years.

•In response to drought in the Horn of Africa, the WBG is providing $1.8 billion to save lives, improve social protection, and foster economic recovery and drought resilience.

•A first-of-its-kind risk management product provided by the IFC will enable protection from volatile food prices for farmers, food producers, and consumers in developing countries.

•The Bank is supporting the Global Agriculture and Food Security Program (GAFSP), set up by the WBG in April 2010 at G20’s request. Seven countries and the Gates Foundation have pledged about $1.2 billion over 3 years, with $752 million received.

•The Global Food Price Crisis Response Program (GFRP) has reached 40 million people in 47 countries – through $1.6 billion in emergency support. From July 2012 onwards the Bank’s emergency response is channeled through the International Development Association’s Crisis Response Window and the recently approved Immediate Response Mechanism that will provide basis for emergency assistance in the future. 

•The Scaling Up Nutrition (SUN) framework for action to address under-nutrition was endorsed by over 100 partners, including the World Bank.

•The WBG is coordinating with UN agencies through the High-Level Task Force on the Global Food Security Crisis and with non-governmental organizations.

•Supporting the Partnership for Agricultural Market Information System (AMIS) to improve food market transparency and help governments make informed responses to global food price spikes.

•Advocacy for more investment in agriculture research — including through the Consultative Group on International Agriculture Research (CGIAR) – and monitoring agricultural trade to identify potential food shortages.

•Supporting improved nutrition among vulnerable groups through community nutrition programs aimed at increasing use of health services and improving care giving. As part of its response to the food crisis, the Bank has supported the provision of some 2.3 million school meals every day to children in low income countries.

•IFC will invest up to $1 billion in the Critical Commodities Finance Program, aimed to support trade in key agricultural and energy-related goods, to help reduce the risk of food and energy shortages, as well as improve food security for the world’s poorest

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National Housing Markets Improving Winston Rowe & Associates

August 6, 2012 – A total of 80 metropolitan statistical areas across 32 states and the District of Columbia were listed as improving housing markets on the National Association of Home Builders/First American Improving Markets Index (IMI) for August, released today.

This included 75 markets that retained their places on the list along with five new ones, while nine areas fell from the list due primarily to slight movements in house prices. The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months.

The five metros that were added to the list this month include Miami and Palm Bay, Fla.; Hinesville, Ga.; Terre Haute, Ind.; and Lubbock, Texas. “The list of improving housing markets in August includes metros across every region of the country, all of which have distinctly different characteristics in terms of their economic and employment bases as well as other factors,” noted Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “One thing that most markets have in common, however, is the tight lending environment for both builders and buyers that continues to drag on their positive momentum.” “The fact that we continue to see a strong core of metros showing up on the improving list each month adds to the growing evidence that the emerging housing recovery has a solid foundation on which to build as housing returns to its traditional role of driving economic growth,” observed NAHB Chief Economist David Crowe. “With nearly one quarter of all U.S. metros currently designated as improving housing markets, there is growing recognition among consumers that now is an opportune time to consider a home purchase,” added Kurt Pfotenhauer, vice chairman at First American Title Insurance Company.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six months following those measures’ respective troughs before being included on the improving markets list.

Commercial Real Estate Funding No Upfront Fees Winston Rowe & Associates

Winston Rowe & Associates, a no advance fee commercial real estate funding specialist provides custom financing solutions or all types of commercial real estate properties nationwide.

For more information about Winston Rowe & Associates commercial real estate financing programs, they can be contacted at 248-246-2243 or visit them online at

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Winston Rowe & Associates has an excellent knowledge based investor resource for commercial real estate valuation and market analysis located at: Winston Rowe & Associates 31408 Harper Ave Suite 147 Saint Clair Shores MI 48082 248-246-2243 Winston Rowe & Associates provides no upfront fee commercial bridge financing in the ensuing states.

Trump to Acquire Miami’s Doral Hotel for $150M

The Trump Organization has announced that it will purchase Miami’s iconic Doral Hotel & Country Club for $150 million.
KBS REIT Acquires 46-Acre Office Park Near Seattle for $78.7MMid-Year 2012 Commercial Real Estate Investment OutlookCMBS Market Active, But Volume Still Dashes HopesCapmark Financial Group Receives $1.55B Distribution From Capmark BankKilroy Realty Makes $79M Hollywood Acquisition More Latest News
This is Trump’s second major hotel acquisition this year. Earlier this month, Trump Hotel Collection was selected by the U.S. General Services Administration to be the developer of Washington, D.C.’s The Old Post Office. Trump International Hotel, The Old Post Office, Washington, D.C. is slated for a 2016 opening.
Doral is legendary for its four championship golf courses, including the Blue Monster, which has hosted a Professional Golf Association Tour event every year since its opening in 1959, the Doral Open from 1962 to 2006, and the World Golf Championship (WGC) since 2007; a 700-room resort; extensive ballrooms and meeting facilities; the Pritikin spa; and the Golf School.
The Trump Organization is planning a multimillion-dollar renovation, with the intention of restoring Doral to its former grandeur. The Trump Hotel Collection, the hotel management division of The Trump Organization, will assume the management of the property by next June. The property will remain fully operational throughout the renovation, which is expected to conclude in late 2013.
The nearly 800-acre Doral Country Club includes 700 hotel rooms in 10 lodges; four golf courses; more than 86,000 sq. ft. of meeting space, including a 25,000-sq.-ft. ballroom; a 50,000-sq.-ft. spa with 33 treatment rooms; six food and beverage outlets; extensive retail; and a private members’ clubhouse.
Renovation of the main building, lodges, conference areas, spa and Champions Pavilion is planned to set a new tone for the resort, and the Members’ Clubhouse will be redesigned to include upgraded facilities and amenities. All four golf courses will be upgraded, and the driving range will be lengthened and expanded to more than twice its current size.

“It would be impossible for a developer today to replicate a property of this size in Miami at any cost,” Donald J. Trump, chairman and president, said in a statement. “When Doral first opened, it was considered the best resort in the world. The combination of the property’s incredible location in the heart of Miami and our very significant investment in upgrading the resort will enable us to return Doral to its former glory, if not surpass it.”

Ivanka Trump, executive vice president of development and acquisitions, is overseeing the purchase, redevelopment and repositioning along with her father.

The Trump Organization has retained renowned golf course architect Gil Hanse to work directly with Donald J. Trump and the PGA Tour leadership to renovate the Blue Monster.

Mid-Year 2012 Commercial Real Estate Investment Outlook

Investor sentiment withstands latest headwinds Low job growth, recession in Europe barely dampen buyer appetites.
Investor confidence in the commercial real estate recovery has not been shaken by the latest jolt of economic uncertainty. Investors’ views of commercial real estate barely budged in the second quarter, according to results from the NREI/Marcus & Millichap Investor Sentiment Survey. The Investor Sentiment Index, which measures investor views on key fundamentals such as rising property values and plans to increase holdings, dipped just 2 points from 166 in first quarter to 164 in second quarter…

US STOCKS-Futures climb before payrolls report; 4-day slide may end

NEW YORK, Aug 3 (Reuters) – U.S. stock index futures rose on Friday ahead of key data on the U.S. labor market, indicating the S&P 500 may reverse a four-day losing streak.

The Labor Department releases the July employment report at 8:30 a.m (1230 GMT). U.S. employment probably only inched up in July as the economy struggled to regain momentum, strengthening expectations of additional monetary stimulus from the Federal Reserve. Non-farm payrolls likely rose 100,000 last month, according to a Reuters survey, after gaining 80,000 in June.

The S&P 500 index has fallen more than 1.5 percent this week as investor hopes for further stimulus measures from central banks were dampened and a trading error at market maker Knight Capital Group Inc on Wednesday dealt another blow to confidence in market structure.

“It’s sort of a bounce back from yesterday’s disappointing comments from Draghi,” said Cort Gwon, chief strategist at HudsonView Capital Management in New York.

“But a big disappointment in the jobs number will accelerate the timetable for the Fed to do some sort of additional liquidity or QE3-type situation, so bad news could be good news if the jobs number is pretty bad.”

The S&P 500 decline comes after the benchmark index saw its best two-day run of the year to close out the prior week as European Central Bank President Mario Draghi heightened expectations for more immediate action to contain the euro zone debt crisis when he pledged to do “whatever it takes” to save the euro. But on Thursday, he dashed hopes for quick rescue measures.

Knight Capital shares slumped 7.4 percent to $2.39 in premarket trade as the company fought for survival after a $440 million trading loss caused by a software glitch wiped out much of its capital. U.S. securities regulators are looking into the events surrounding the trading glitch.

S&P 500 futures rose 12.1 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 99 points, and Nasdaq 100 futures gained 26.5 points.

Other economic data expected later in the session includes the Institute for Supply Management’s July non-manufacturing index at 10 a.m. (1400 GMT). Economists in a Reuters survey forecast a reading of 52.0 versus 52.1 in June.

Dow component Procter & Gamble Co posted a drop in quarterly sales and said it would repurchase $4 billion worth of its shares this fiscal year.

LinkedIn Corp gained 8.3 percent to $101.25 in premarket after the professional networking site reported higher-than-expected revenue and raised its full-year outlook as it pocketed more money from subscribers, services aimed at businesses and advertising.

NYSE Euronext said new strategies and cost cuts should help the trans-Atlantic exchange return to growth next year after losses in its three main business lines forced quarterly income down a fifth.

According to Thomson Reuters data though Thursday morning, of the 385 in the S&P 500 that have reported results, 67 percent have reported earnings above analyst expectations. Over the past four quarters, 68 percent of companies beat estimates.

European stocks rose, erasing most of the previous day’s pullback and resuming a week-long rally as investors judged the European Central Bank remains committed to bold action to fight the debt crisis. The FTSEurofirst 300 index of top European shares was up 1.6 percent.

Asian shares fell as investors shunned risk after the European Central Bank took no immediate action and only hinted at future steps to tackle the euro zone’s fiscal woes, following similar inaction from the U.S. Federal Reserve.

CNBC Get Used to ‘New Norm’ of 6-7% US Jobless Rate

The jobless rate in the United States will never go back to where it was before the global financial crisis and people will have to get used to a “new normal” of 6-7 percent even if the economy starts revving up from where it is now, observers tell CNBC.

As the U.S. government prepares to release nonfarm payroll numbers for July on Friday, economists expect about 100,000 jobs created during the month and the unemployment rate to remain steady at 8.2 percent. 80,000 positions were added in June.

However, some investors say the consensus is too optimistic and higher structural unemployment is here to stay.

“We really have a fundamental change in the workforce,” Michael Yoshikami, Founder and CEO of Destination Wealth Management told CNBC Asia’s “Squawk Box” on Friday.

“We should have realized that the unemployment rate is simply not going to go back where it was and we should start realizing that there is a new normal and the real unemployment rate in the United States will be 6-7 percent, where the recovery is in full steam, rather than 4 percent.”

Nonetheless, he expects job growth to be positive albeit “very sluggish” going forward.

Patrick O’Keefe, Director of Economic Research with consulting firm J.H. Cohn, agrees that job growth is simply not as robust as it should be and that unemployment will be higher than normal. He estimates that 65,000 positions were added in July and that the public sector will also continue to shrink as municipal governments cut workers.

“With respect to the trend rate of both GDP growth and employment growth, we should be looking at a slower trend rate of growth in total output and a higher natural rate of unemployment, or full employment rate, if you will,” O’Keefe said. “When you look at the indicators of demand in the economy, the output measure, income measures, the economy here is decelerating and employers are very reluctant to take on additional workers.”

Most of the growth that we’ll see in the coming month, as was the case in June, will be in temporary and part-time positions, he added.

Fed Will Act on ‘Disastrous’ Jobs Number

The U.S. Federal Reserve conceded on Wednesday that the economy has “decelerated somewhat” but stopped short of offering new stimulus to spur growth. Fed officials nevertheless showed it was prepared to do more to support an ailing economy.

U.S. economic growth slowed to 1.5 percent in the second quarter as consumer spending faltered, and unemployment remains high. Job growth slowed sharply in the second quarter to just 75,000 jobs per month from 226,000 in the first quarter.

While the Fed may need to act to prop up the economy, it is also treading a fine line between injecting too much liquidity and doing enough to provide a boost to the labor market that, while is weakening, is not “disastrous,” Yoshikami of Destination said. The Fed is closely watching the jobs number but it will take more than a below-consensus number for the Fed to act, he added.

“What’s really an issue is how the Fed going to walk that fine line, if the number is 65, 70, 75 (thousand),” he said. “Yeah, it’s under consensus, but it’s not disastrous. A disastrous number is green light for Fed action.”

The Fed has already expanded its balance sheet twice since 2008, the first time in 2008 by $600 billion in new assets and new liabilities. The second round was in 2010 when it purchased $1.25 trillion of mortgage-backed securities in order to support the sagging mortgage market.

O’Keefe expressed doubts that anything the Fed can do this time round that will turn the economy and labor market around.

“Even if they have a trick up their sleeve which is going to do something other than increase the excess reserves which is already at record levels and drive down interest rates that are already at record lows, it’s very hard to see what’s in the monetary toolbox that can do anything in the short turn to turn around the rate of growth,” O’Keefe said.

And even if the number on Friday came in at 65,000, it may not warrant “immediate action” from the Fed because it is a small difference between 100,000 in a labor market of 133 million people. Data will have to deteriorate further.

GM earnings top forecasts despite Europe woes

Earnings at General Motors fell sharply due to “headwinds” in Europe, but still easily topped forecasts.
The world’s largest automaker reported that profits were down 41% from a year ago to $1.5 billion, or 90 cents a share, in the second quarter. Still, that was well ahead of the 74 cents a share of profit that analysts were expecting, according to Thomson Reuters.
GM shares jumped as much as 5% in premarket trading immediately following the report, but gave up those gains after the European Central Bank failed to take action to spur the EU economy. Shares were slightly lower in late morning trading.
Total GM sales fell 5% to $37.6 billion, even as the number of vehicles sold worldwide edged up slightly. The revenue decline was due to a strengthening of the dollar compared to a year ago.
GM’s operating profit in North America slipped 13%. But the big hit to earnings came from Europe, where GM lost $361 million. It was profitable in Europe a year earlier.
Sales in Europe fell in the face of high unemployment and widespread recession related to the European sovereign debt crisis.
CEO Dan Akerson told analysts that the company is in talks with German unions about a new comprehensive agreement that will address productivity, costs and the company’s excess capacity. The agreement is expected to be in place this fall.
“In the past, we haven’t moved fast enough to fix the things [in Europe] we can control,” he said. “But that has changed.”
GM’s international unit, which includes operations in China and other countries outside of the Americas and Europe, reported that profits fell just 3% from a year ago. But GM’s South American business posted a narrow loss.
The economic funk in Europe has become the most serious problem for the global auto industry. Last month, Ford Motor reported a 57% plunge in profits in the second quarter due to mounting European losses.
While Toyota Motor earnings are expected to improve when it reports results Friday, that’s because its operations were greatly affected by damage from the Japanese earthquake and tsunami last year. Toyota is also likely to note weaker demand in Europe.
Of the major U.S. automakers, Chrysler Group is the only one that has not been hurt by Europe, despite being owned by Italian automaker Fiat. Chrysler has a limited European footprint, and saw second-quarter earnings that were sharply higher.
Still, GM and other automakers may also have to contend with a weakening U.S. economy for the rest of the year.
GM reported a bigger than expected drop in U.S. sales in July. It was a disappointing month industrywide for car sales, raising worries that consumers are pulling back after strong demand in the first half of the year.
GM didn’t announce any immediate changes to stem losses in Europe. Executives refused to give any guidance on how large losses will be during the rest of the year or how long they’ll continue, saying only that it remains a challenging environment.
“We clearly have more work to do to offset the headwinds we face, especially in regions like Europe and South America,” said Akerson.
GM recently shook up management of its European operations, naming vice chairman Stephen Girsky as the interim head of operations there. But the problems in Europe are deeply entrenched. GM estimates that it has lost $14 billion in Europe over the last 12 years.
Still, even with the problems in Europe and some softening demand for its cars at home, the results reported Thursday mark an impressive turnaround for a company that was in bankruptcy only three years ago and kept alive through a government bailout.
Thursday’s results marked the tenth straight quarter of profitability, a milestone GM had not achieved in more than a decade.

White House presses for Cybersecurity Act

The White House rolled out its cybersecurity A-team Wednesday for an on-the-record telephone conference, with reporters hearing an appeal for the Senate to pass the Cybersecurity Act of 2012 now being debated on the Senate floor.

John Brennan, assistant to the president for homeland security and counterterrorism, was joined by Keith Alexander, chief of U.S. Cyber Command and head of the National Security Agency, as well as Jane Holl Lute, deputy secretary at the Department of Homeland Security, and Eric Rosenbach, deputy assistant secretary of defense for cyberpolicy.

“The risks to our nation are real and immediate,” Brennan said, adding that the White House doesn’t see the legislation as a partisan issue, but rather a matter of national security.

Brennan said that if passed, the new legislation would give the government the three legislative elements it needs to fend off cyberattacks: new information sharing between the government and private industry, better protection of critical infrastructure like the power grid and water filtration facilities, and authority for the Department of Homeland Security to unite federal resources to lead the government’s cybersecurity team.

“First and foremost, we see that the threat is real and we need to act now,” said Alexander, who recently returned from a hacker convention in Las Vegas, where he urged the best and the brightest to put their skills to work for the government.

He stressed that the new legislation would enable the government to prevent an attack, not just respond to one, and said the FBI, DHS, Cyber Command and the NSA can unite as a team to do so. He said he believes the current legislation adequately addresses privacy and civil liberty concerns that critics have raised.

Lute added that the status quo is simply unacceptable and that the current DHS cyberteam receives a phone call every 90 seconds reporting a new intrusion.

Brennan said President Obama has received regular updates on the status of the legislation this week. The urgent appeal comes as Congress prepares to take its August recess Friday.

The drought baking Midwest corn and soybean crops will likely cost the U.S. food export industry billions in lost revenue. But unlike droughts in previous years, it should not cause a major disruption in worldwide food supplies. Crops from other nations can mostly cover the loss, although some people who have recently grown accustomed to eating more meat, especially in developing nations, may have to cut back on it. The United States accounts for over half the global export market for corn and nearly half of the soybean market. Some corn ends up in products like cereal and soda, but the biggest chunk is used as feedstock for pork, chicken and beef. All told, U.S. agricultural products account for roughly 10% of the country’s $1.5 trillion export market, according to the Census Bureau. Exports of corn, soybean and meat products — the items most at risk from the drought — totaled $53 billion in 2011. The drought this year “will definitely hurt the quantity of exports,” said David Hightower, president of the agricultural futures newsletter The Hightower Report. By how much is hard to say. It’s estimated the corn crop could be 10% to 15% smaller than expected this year due to the drought. “The next two weeks are the most significant, maybe in modern history,” Hightower said. Although some of the corn crop is probably lost for good, much of the soybean crop could be saved if rain falls soon. But if it remains dry, then the situation gets markedly worse. If things get as bad as people fear, a handful of countries may have to shift their food consumption. Most U.S. corn and soybean exports go to four countries: China, Japan, Mexico and South Korea. The soybean situation isn’t as bad as that of corn. South America, has had a good soybean harvest, said Bruce Scherr, CEO of the agriculture research and consulting firm Informa Economics. But corn is another matter. China is probably in the clear — the country looks to be on its way to a record corn crop, said Scherr. But the other countries will have to either “pay up or cut back,” he said, with Japan and South Korea probably choosing to pay up and Mexico probably cutting back a bit. Most of exported corn and soy is consumed by livestock, so the cutbacks will most likely affect meat consumption and not staple foodstuffs. Cutting back on meat will probably not equal hunger, or likely even anything close to it. Unlike in 2007, when a worldwide drought sparked serious food shortages, this year has seen strong crops of rice and wheat. Plus, worldwide stockpiles of corn, soybeans and other crops are healthy. “I don’t think there will be major shortfalls in supply,” said Divya Reddy, a natural resources analyst at the Eurasia Group. And many of those most in danger of malnutrition — extremely poor people in Africa — rely on white corn, which is generally not grown in the United States and which hasn’t been hit by drought. “I don’t expect this to impact the poorest of the poor,” said Maximo Torero, head of markets and trade at the International Food Policy Research Institute. “It’s more the meat market.”

Can Congress get out of the economy’s way?

The Federal Reserve has made clear it’s standing down for now on more steps to aid the economy.

So the job is back to Congress.

The U.S. economy, of course, faces a lot of risks. But one of the biggest is Congress itself.

And it’s a risk that Federal Reserve Chairman Ben Bernanke has said repeatedly he can’t counteract if lawmakers fail to agree on how to lessen the impact of the fiscal cliff.

That cliff is made up of $7 trillion worth of tax increases and spending cuts set to start taking effect 5 months from now.

Economists have warned that letting those policies take effect in full could push the economy into a recession next year.

“[I]f no action were to be taken, the size of the fiscal cliff is such that there’s I think absolutely no chance that the Federal Reserve … could or would have any ability whatsoever to offset … that effect on the economy,” Bernanke said a few months ago.

This month he was equally blunt, noting it is not the Fed’s role to crack the whip on lawmakers to act fiscally responsible. “Congress is in charge here,” he said.

So is Congress taking charge? Lawmakers are trying to show that they’re taking charge.

Leaders from both parties have made much of two bipartisan deals reached this week that must still be approved by both chambers of Congress.

The first is an agreement to fund the government for the first six months of fiscal year 2013, which starts in October.

“This agreement reached between the Senate, the House and the White House provides stability for the coming months,” said Senate Majority Leader Harry Reid on Tuesday.

Except that it really won’t.

Sure, it would prevent the threat of a government shutdown. But it does nothing to address any of the measures of the fiscal cliff, except to establish the funding level from which the so-called sequester of spending cuts must be made. Other than that, “this deal doesn’t affect the sequester whatsoever,” said budget expert Stan Collender.

The measure won’t be voted on until lawmakers return from summer recess in September.

Then there’s the bipartisan deal cut Wednesday by the top Democrat and Republican on the Senate’s tax-writing committee. That deal will extend for a year many smaller tax breaks that are set to expire or already have, and it eliminates 25% of the “usual” tax extenders.

“This win shows we’re able to come together to tackle tough problems,” said Sen. Max Baucus, the committee chairman.

Ranking member Orrin Hatch described it as a “first step towards … tax reform that shows that there is a path to resolving the challenges we face as a nation.”

But as tough problems and first steps go, it’s not that hard or that big a leap to agree on extending many popular tax breaks and add the cost — an estimated $205 billion — to deficits.

In the meantime, the House this week had a predictable partisan debate over how to extend the Bush tax cuts — a major part of the fiscal cliff. The Republican-preferred version passed.

But it will go nowhere in the Senate, which went through the same exercise last week. The Senate passed the Democratic-preferred version, which will go nowhere in the House.

Then there’s the specter of the nearly $1 trillion in spending cuts — half in defense and half in non-defense — that neither party likes but which Congress has yet to seriously focus on replacing.

The House Armed Services Committee on Wednesday held a hearing to discuss how the Obama administration will direct federal agencies to plan for the cuts.

Some of the hearing stayed on point, but the rest devolved into a blame game.

First there was back-and-forth on who is to blame for the sequester in the first place. Then it switched to which party is to blame for holding up a Bush tax cut extension. And then finally conversation turned to who was to blame for turning the hearing on a very bipartisan issue into a partisan food fight.

About 365,000 people filed jobless claims in the week ended July 28, up 8,000 from the previous week

About 365,000 people filed jobless claims in the week ended July 28, up 8,000 from the previous week, the Department of Labor said Thursday.

Jobless claims are closely correlated with layoffs and are seen as a key gauge of the strength of the job market.

It’s unclear whether last week’s slight rise is a negative sign for the job market, given initial claims have been more volatile than usual lately. Economists often prefer to look at a four-week moving average to smooth out the volatility, and this measure has been falling.

Meanwhile, 3.3 million people filed for their second week of unemployment benefits or more in the week ended July 21, the most recent data available.

WSJ Low-paying jobs are here to stay

Some 28% of workers are expected to hold low-wage jobs in 2020, roughly the same percentage as in 2010, according to a study by the Economic Policy Institute.

The study defines low-paying jobs as those with wages at or below what full-time workers must earn to live above the poverty level for a family of four. In 2011, this was $23,005, or $11.06 an hour.

The economy won’t support much growth in jobs with higher salaries, said Rebecca Thiess, policy analyst at the left-leaning Economic Policy Institute, who crunched government data to come up with these projections.

“Far too many economic pundits take for granted that the economy of the future will demand far greater skills and credentials,” she wrote in a recent paper.

While all eyes are on Friday’s monthly jobs report to find out how many positions were added in July, a growing number of economists are concerned with the quality of the jobs being created.

Lower wage occupations grew by 3.2% over the year ending in the first quarter of 2011, according to the National Employment Law Project. This was fueled mainly by the expansion of retail salespeople, office clerks, cashiers, food prep workers and store clerks, whose median hourly wages ranged from $7.51 to $13.52.

Four of the five occupations with the highest concentration of low-salary jobs are set to grow by 2020. These include farming, personal care, building and grounds maintenance and health care support. All have at least 45% of their employees earning at or below so-called poverty wages.

Only food preparation jobs, which have the greatest share of low-wage workers at nearly 74%, are expected to shrink a bit.

And lousy paying jobs are getting even lousier, as their pay has fallen. Workers at this end of the pay scale actually found their wages shrank in recent years, according to NELP. Between early 2008 and early 2011, low-wage workers’ median pay contracted by 2.3%, more than double the rate of mid-wage employees.

Meanwhile, higher wage workers enjoyed a small increase in pay.

Mid-wage jobs, which were hit especially hard during the recession, expanded by only 1.2%. Higher-salary occupations declined by 1.2%.

The predominance of low-wage jobs is not good for either workers or the economy, said John Schmitt, a senior economist at the Center for Economic and Policy Research. These jobs often lack pension benefits and health insurance, as well as sick days and vacation time. There is also little path for advancement.

If workers are making low wages, they can’t afford to shop and prop up the American economy, he said. Around two-thirds of the economy is consumer spending.

Also, since low-wage workers are better educated now than they have been in the past, college may increasingly seem like a questionable expense.