Late in 2010, economists revised their growth forecasts upward as a result of the tax agreement reached by Congress in the lame-duck session at the end of 2010. This agreement included a two-year extension of the Bush-era tax cuts, a 13-month extension of federal jobless benefits, a temporary cut in the share of the Social Security payroll tax paid by employees and several other provisions. And, right on cue, growth GDP growth climbed to 3.1 percent in the fourth quarter, and other indicators began to point toward a stronger 2011.
However, some economists have been revising their growth forecasts downward in the past few weeks as a result of rising oil prices, global turmoil (eurozone, the Middle East and Japan), persistent weakness in the housing market, and layoffs in state and local governments. While highlighting the fact that no one has a crystal ball, these roller coaster forecasts suggest that the economy is not yet in calm waters, which could impact the pace of recovery for commercial real estate.
