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The Raub Blog

Moderate Growth, but CRE lags

by admin on October 16, 2010

October 15, 2010 – Wells Fargo Monthly Outlook  by Rebecca Rouse:

 – Moderate economic growth will continue to be the story until tax season passes in early 2011.    On the plus side, gains in consumer spending, equipment & software spending, and federal government spending will keep the economy moving forward.

.     For the next three quarters, we anticipate that consumer spending will benefit from a streak of positive employment reports and by mid-2011, lower unemployment rates and rising real personal income will be present.

.     Commercial real estate will still be a drag, reflecting current high vacancy rates and limited risk-taking.  The surprise story of the next three quarters will be the turnarounds in residential construction and inflation.      Housing starts are thought to have bottomed and will likely increase for the next four quarters.

– Our expectation is that fiscal policy will turn conservative and so further stimulus spending will be limited, including support for state and local governments.

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