During the first quarter of 2014, the nation’s gross domestic product grew at a disappointing .1%. This was attributed largely to the extreme winter conditions that most of the country experienced and growth was expected to increase after these conditions abated. In testimony before Congress earlier this month, Janet Yellen, the Chairman of the Federal Reserve, stated as much and also stated that recent economic data shows that this expectation was correct and that the economy has picked up steam since the winter thaw began. Now new economic projections from the Federal Reserve Bank of Philadelphia have been released that support Ms. Yellen’s statement and point to an economy that should grow at an even faster rate than originally projected. As the economy continues to expand consumer demand for goods and services will grow with it. Senior housing will benefit from this increased demand while also continuing to benefit from the demand caused by the aging of the population. While these factors persist, senior housing providers and investors who are anxious to take advantage of this situation by acquiring additional senior housing assets should continue to look to the Chicago-based financing firm Cambridge Realty Capital to finance these transactions.
Economists Raise Growth Forecasts
The Federal Reserve Bank of Philadelphia recently surveyed 42 economists and their responses indicate that the economy should grow at a faster rate than originally projected. According to the survey’s respondents the economy as measured by the nation’s gross domestic product (GDP), should grow at an annual rate of 3.3% in the second-quarter, instead of the 3% that was originally forecasted. Similarly, projections for third-quarter growth have increased from 2.8% to 2.9% and projections for fourth-quarter growth have also increased from 2.7% to 3.2%. In line with upward GDP revisions, the survey also reveals that job gains for the rest of the year are expected to increase as well. For example, economists believe that non-farm payrolls will grow by 232,000 each month during the second-quarter instead of the 193,500 that was originally forecast as employers who held off on hiring during the winter began to aggressively look for job candidates who can help them meet the increased demand that is being generated by the growing economy. Average monthly job gains should come down to 204,700 in the third-quarter, but that is still higher than the previous forecast of 195,200. Finally, overall job gains for the year should average 196,500 which is nearly 5% higher than the previous forecast of 187,700. Furthermore, at an average of 1.8% for the second and third-quarters, inflation is expected to remain low as well.
While these projections are based on scores of data that are poured over by economists, they are still just projections and only time will tell how accurate they turn out to be. It’s possible that growth could exceed these figures, or it could come in slightly lower than what’s projected. However, it is extremely telling that both Chairman Yellen’s Congressional testimony and the Federal Reserve Bank of Philadelphia’s economic survey all support the expectation that the economy is poised for additional growth. This indicates that these new economic projections are rooted in solid data and analysis. As the year continues and this projected growth comes to fruition, senior housing providers and other interested parties who are seeking capital in today’s low-interest environment to take advantage of the opportunities created by the improving economy should contact Cambridge Realty Capital to learn more about the many different financing programs that it offers.