5 Economic Signals Reshaping the Fall Outlook

1. Growth Momentum Rebuilds
Economists now project U.S. GDP growth at 1.8% for 2025, up from 1.3% in June. While slower than 2024’s 2.4%, the upgrade signals renewed confidence after months of mixed data and uncertainty.

2. Corporate CapEx Goes High-Tech
Forecasts for nonresidential investment nearly doubled to 3.8%, powered by a surge in AI infrastructure and data center construction. Tech-driven capital spending is now the primary growth catalyst across industrial and CRE sectors.

3. Consumers Still Carry the Cycle
Real consumer spending remains solid at 2% expected growth, supported by rising asset values and stable employment. The pace is moderating, but household demand remains the backbone of economic momentum heading into 2026.

4. Inflation Cooldown, New Risks Heat Up
Core inflation expectations have eased to 3.1% for 2025, marking progress on price stability. Yet the emerging wildcard is tariff-related cost pressure, not runaway inflation — a shift that’s redefining the downside risk narrative.

5. Labor Market Transitions, Productivity Emerges
Job growth forecasts have slowed to ~60,000 per month, but more than half of economists now see productivity gains as a key upside surprise. The story isn’t about labor softening — it’s about efficiency gains driving output.

What We’re Watching
Fed Chair Jerome Powell received a standing ovation at the NABE conference in Philadelphia, where he suggested another rate cut may be on the table as labor demand cools and data reliability wanes.

Key Takeaway:
The U.S. economy is shifting from stimulus-driven growth to efficiency-driven stability. For commercial real estate professionals, this phase demands precision in timing, capital strategy, and deal execution.