It’s a New Year: Matthew Gardner’s economic reflections and thoughts

This week, 2010 is drawing to a close and 2011 is dawning. Economist Matthew Gardner recently shared his reflections on 2010, along with his thoughts regarding 2011, over at Neighborly News.

Gardner delved into 6 economic indicators that are helpful to examine if you are considering a real estate transaction during 2011.

First he examined the Gross Domestic Product (GDP). The GDP only grew by 2.5 % during the 3rd Quarter of 2010. While it was shy of the 3% mark, which indicates solid economic growth, the fact that there was growth is positive. Armed with this information, Gardner anticipates a few things: while he does not see a return to recession during 2011, he indicates that more of the growth during 2011 will occur the second half of the year.

Unemployment, which remained high throughout 2010, will likely see slow improvements during 2011. Gardner suggests that companies will reduce layoffs substantially by the end of 2011, but will hold back on hiring new employees. ” I believe that next year will see the overall unemployment rate drop, but the improvement will be slow; if we end the year at around 8.5 percent I will be happy,” states Gardner.

Regarding real estate, Garnder discusses the how the market is effected regionally. He shares his thoughts about some of the harder hit markets, like Las Vegas, Phoenix and Houston. He also briefly discusses what he expects to see, regarding national real estate pricing trends, before the end of 2011.

Gardner suggests that the growth we’ve seen in consumer confidence in recent months shall continue during 2011. Further, he is not concerned about inflation in the short-term, and projects that “core inflation” will remain below 1%.

Last, he addresses interest rates. Even though interest rates have been rising lately, he does not see indicators that they will rise dramatically during 2011. However, Gardner does suggest the trend regarding rates will be to slowly increase during the year.

I am, as ever, hopeful that the U.S. will show resilience and that better days are, indeed, ahead. ~ Matthew Gardner

Please read his blog post and examine the links he includes in the post. Gardner’s discussion of the US economy is informative and thought-provoking. Best of all, he shares his positive, but realistic, outlook regarding the next 12 months.