Sentiment and recession risk rise
American consumer sentiment fell to its worst reading in half a century, and one market commentary notes Goldman Sachs has raised its U.S. recession probability to 45%. Those macro signals are being cited alongside tariff and energy uncertainty as headwinds for occupier demand. (webanditnews.com) (webanditnews.com)
U.S. consumers turned sharply gloomier in early April, and Goldman Sachs now puts the chance of a recession in the next 12 months at 45%. (sca.isr.umich.edu) (streetinsider.com) The University of Michigan’s preliminary consumer sentiment index fell to 47.6 from 53.3 in March, a 10.7% monthly drop in data released Friday, April 10. Consumers also lifted their one-year inflation expectation to 4.8% from 3.8% a month earlier. (sca.isr.umich.edu) (cnbc.com) Survey director Joanne Hsu said declines appeared across age, income and political groups, with middle- and higher-income households hit hard by rising gasoline prices and volatile financial markets. The Michigan survey said its short-run economic outlook fell 14% and expected personal finances for the year ahead dropped 10%. (sca.isr.umich.edu) (reuters.com) Goldman Sachs raised its recession probability from 35% to 45%, its second increase in a week, after previously lifting the forecast from 20% to 35%. Reuters reported the bank tied the change to an escalating trade war and weaker growth expectations. (streetinsider.com) (finance.yahoo.com) Those signals are feeding directly into commercial property decisions, where leasing demand depends on whether employers feel confident enough to hire, expand or move. CBRE said tariff uncertainty is likely to weigh on leasing and investment activity, especially in industrial and retail property. (cbre.com) Tariffs affect real estate indirectly as well as directly: they can raise the cost of imported materials, but they can also delay corporate decisions when executives do not know what demand, prices or supply chains will look like a quarter from now. Fennelly Associates said the immediate effect in commercial real estate is that companies “freeze” decisions on space. (budgetlab.yale.edu) (fennelly.com) Energy costs are part of the same picture. The Michigan survey said nearly all interviews were completed before a temporary cease-fire announcement, indicating the Iran conflict and the jump in fuel prices had already hit household expectations by the time the April reading was taken. (sca.isr.umich.edu) (tradingeconomics.com) The recession call is still a probability, not a forecast that a downturn is certain, and some property sectors could hold up better than others if trade policy eases. CBRE said the size of the hit to commercial real estate will depend on how long tariffs stay in place, whether other countries retaliate and how negotiations end. (streetinsider.com) (cbre.com) For now, the clearest new number is 47.6: a sentiment reading low enough to put households, markets and landlords on the same recession watch. (sca.isr.umich.edu)
