Professional Report - 1st Quarter 2012

Consumer Prices
Unemployment Rate

tion equipment (up 17. 8 percent). Trade remained a bright spot during the fourth quarter, as both exports and imports increased by 4. 3 percent and 3. 8 percent, respectively.

Government spending—the other major component of GDP—declined 4. 4 percent, due to budget cuts at the federal, state and local levels. At the federal level, defense cuts of 12. 1 percent outweighed increases in nondefense spending. Squeezed by lower revenues, state and local governments continued to slash spending for the sixth consecutive quarter.

Employment closed the year on an upbeat note. After the weak showing of the third quarter, the fourth quarter of 2011 recorded a net 447,000 payroll jobs added to the economy. The bulk of that gain came during December, when private businesses added 220,000 positions. Over the quarter, private service-providing industries accounted for 437,000 of total jobs created. In a positive development for commercial real estate, professional and business services gained 141,000 jobs, education and health added 109,000 jobs, while information, financial activities and leisure/hospitality industries contributed an additional 95,000 jobs.

The trends were also mirrored in the figures for first-time unemployment insurance claims, which broke through the 400,000-per-week floor in November. In addition, the number of people drawing unemployment benefits steadily declined over the quarter toward 3. 6 million (it was 4. 2 million during the fourth quarter 2010). The unemployment rate dropped from 9.0 percent in September to 8. 5 percent in December.

In light of the broader trends, consumers embraced the end of 2011 with a cautious sense of optimism. The two main measures of consumer confidence and sentiment both showed improvements in the last three months of the year. The consumer confidence index compiled by the Conference Board—a measure that considers respondents’ general feelings about the job market and their finances— increased from 40. 9 in October to 64.8 in December. Meanwhile, the University of Michigan survey of consumer sentiment also increased during the fourth quarter, from 60.8 in October to 69.9 in December.

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

United
States
Britain Euro area
India Brazil China Russia Source: Economist Intelligence Unit

SIOR Index

Northeast
Midwest
South
West

160.0

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0.0

2005.Q4

2006.Q1

2006.Q2

2006.Q3

2006.Q4

2007.Q1

2007.Q2

2011.Q4

2011.Q3

2011.Q2

2011.Q1

2010.Q4

2010.Q3

2010.Q2

2010.Q1

2009.Q4

2009.Q3

2009.Q2

2009.Q1

2008.Q4

2008.Q3

2008.Q2

2008.Q1

2007.Q4

2007.Q3

2005.Q3

GDP SIOR Index

150

6

4

100

2

50

SIOR Index Results

Amid broader economic upswings, office and industrial spaces are turning the corner. The fourth quarter SIOR survey mirrors the trends in the national economy.