This is the easiest most straightforward way that I can demonstrate that to you. And how can we get that rectified? I love showing that image center top for the labor shortage, especially the sign that is literally anyone, although we're begging and please still hiring are also nice. And that's about 3%. So some questions have come in with their labor shortage. For office and industrial, it's about eight quarters. As I will show you shortly, I'm not panicking about this, but I do think it's going to be difficult objectively for the Fed to target headline inflation because components like food and energy are just beyond their domain. That is a part of the economy we can target. And we see that manifest itself in different ways. The FedExes of the world, the DHLs of the world, the XPOs of the world, the postal service, UPS, Saddle Creek. And that's a little more precarious. Because if you've been paying attention, the consumer sentiment index, which is produced by the University of Michigan in early June, recently hit the lowest level on record. There are right now about 11.4 million open, but unfilled jobs in the economy. Every country has had a different policy response to the crisis; and within countries different political parties have championed various approaches. And I created this slide to answer the question, where are we in the commercial real estate cycle? One area that I'd like to address to begin with is consumer spending in a couple parts. Our Personal Tax Guide highlights tax planning ideas that may help you minimize your tax liability. The supply side certainly has been disrupted, but maybe there's finally a light at the end of the tunnel in terms of supply disruption. Maybe look at it on a lag basis." And if the Fed embarks on an aggressive course like that, they will push the probability up. That is not going to make people feel tremendously happy, but it's not actually dissuading anybody's behavior. And with that, I'd like to throw it over to Ryan. And unfortunately in the short run, this rift is getting wider, not narrower. The best way to use this guide is to identify issues that may impact you, and then discuss them with your tax advisor. If you have any questions, we'd like to hear from you. I do not think it is inevitable. Thanks, everyone, for joining us today. So I'd say objectively the risk is going up, but I still think the talking heads out there that like to make a lot of noise are making it sound like more of a certainty than I feel like it is at this juncture. There's very quietly been this I think attractive rebuild of inventory on the part of retailers and organizations. I'm a little bit concerned with the Fed's ability to actually go out and target what it thinks it can target. Where's it coming from and how is it actually showing up in the economy? If you think back to the summer of 2020, we're still in the pandemic so the first time I showed this to someone, I was doing the presentation online similar to this, and I showed someone that forecast and they were just they found it so impossible that they felt compelled to come off mute and interrupt me and criticize it. Now, they can certainly bring down other components of inflation, including wage growth if they decide to go after that by siphoning that excess demand out of the labor market, but we're going have to keep an eye on this because they might ultimately be able to bring inflation down, but it is not going to be an easy slog in order to do that. And if you multiply those things together, number of people times number of hours times average wage, you get a proxy for overall spending. The one other pushback on this that I get when I bring this up is somebody will say, "Well, what about higher levels of inflation in the US? I just want to go off of that. And I think that will help us navigate the labor shortage because it's going to persist for a prolonged period, five, 10, 15 years at least, something like that. So some households the ones that don't have as much saved up. What was the second part of your question? How is this actually impacting or not impacting us in the economy and how I think the Fed is going to try to address it and really try to bring about some deceleration in inflation over the next, say 12 to 24 months? That is an incredible, incredible motivator for consumers to go out and spend both in a non-discretionary manner and a discretionary manner. And thanks for that introduction. And I think everyone has heard about the supply chain disruption that we are contending with right now. It doesn't mean it immediately gets back to pre-acceleration levels, but it means that it doesn't stay elevated for a prolonged period of time. I don't know what that means for the future, but I wasn't thrilled to read that when I did. Let's take a look at that." Like I said, it looks spiky. And that gets us to this metric that I'm calling core CPI, core inflation, less fiscal stimulus. Why has that been the case? Not just lockdowns associated with the pandemic, but you've probably heard they're going through a very serious issue now with their real estate market, which has been over leveraged in a way that we have certainly grappled with in the United States and other developed countries over the last couple of decades. If I showed it to you say on an annualized growth basis, it would look even more pronounced than this slide. In fact, if any of my econometric students handed this in as evidence of a tight relationship, I would hand it back to them and say, "Find a tighter relationship." And it is causing that upside surprise that we noted in inflation last month is really predominantly coming from food and energy because of, to a large extent, the situation in Eastern Europe. I think that's certainly true. So I want to at least acknowledge that it continues to be a disruptive force and we're sort of dealing with a little bit of unknown factors like the pandemic. It is demographically-driven. And I'm using vacancy rates as my metric of stabilization. So central bank whatever it takes helicopter money will save the Big Boys, but ignores the effective transmission channel to the masses. I said, "Fine. I think they'll pay attention to the inflation data coming in. I know there's a lot of questions that relate to a crystal ball and there's not known answers, but any thoughts on that? It doesn't run up, stay elevated, and then come down after a prolonged period of time. They can manipulate interest rates, they can manipulate money supply, to a lesser extent they can manipulate banking regulation. It's this difference between the headline inflation, which is being driven, again, largely by energy and food and the underlying core inflation, which is mostly driven by everything else that we purchase as consumers. What I did on this slide is I took the level of employment in the US economy and the number of open jobs in the US economy and I effectively indexed them at the beginning of 2020 so I could make an apples to apples comparison. But that said, I think they're going to pay attention to the data and see how this plays out. Ryan Severino: I would say the Fed is clearly bent on at least getting back to neutral, which in my estimation is about two and a half percent on the Fed funds rate. And the Fed sees this excess demand for labor and thinks, "That's where we can go after. This is a proxy for the overall spending power of consumers in the economy. And to be fair, I will tell you objectively of the economic prognosticators that are out there. That when we get to the point where the harvest is disappointing, not just in that part of the world, but potentially even in other parts of the world because that part of the world also produces a lot of the fertilizer that gets utilized in other places that it could start to foment social unrest. During the webinar the author will present the argument of the book and cosider what it has to tell us in the light of the current pandemic. It's considered to be a differentiator. If the Fed raises rates too much and they overshoot, they will almost certainly cause a downturn and the market will not be shy about telling them that they have gone too far, much like they did last cycle. And even within that realm of high inflation, I don't really see a meaningful relationship between these two variables. I think it's a little more the monster that might or might not be in your closet, but I do think there's a legitimate concern that if this festers for too long, it could ultimately start to manifest itself in a much more meaningful and pronounced way if people change their behaviors and it translates into slower growth, if not an actual downturn. Therefore, I think organizations are using this not just to check a box and tell their clients, "Hey, look. Travis Epp: Thank you, Bella, and thank you everyone for joining us this afternoon to discuss an economic update in turbulent times. Switching gears a little bit, Ryan. But the other part of this that I won't say I worry about, but I think about is should we actually fear higher inflation? Andrew Sheng invites YSI scholars to crowd-study the financial condition of those most vulnerable to lockdown, drawing upon diverse data sources to build a more composite picture of how different systems are inter-connected, interdependent with contingent reflexivities. But again, as I sit here today, I do not think it is a foregone conclusion. It brings me to the next image on the slide, thinking about Eastern Europe. They didn't want to be concentrated in China, dependent on China given And again, no political statement, but just given the government there, I think there was increasing concern about that. And it's designed to capture a lot of disparate factors in one easy to understand metrics. And that dovetails with your second question. National vacancy peaked in 2020 and it has come down fairly consistently since then. And not from a political point of view, but what I would say from an economics point of view is that this is also exacerbating inflation because as I think people are well aware, that part of the world is very important to global energy and global food production. I'll concede that the crystal ball gets murkier beyond the end of next year, '24, '25, '26. And I think that's one of the reasons why you'll also see not just the supply side looking more robust, but probably even an easing and demand in the future. But the problem with this is that the labor market has become so strong that in a sense we've kind of become public enemy number one.

And you could see that has stuck pretty well since the onset of the pandemic. And now there is a very robust consideration for social and environmental impact. I still think there's enough momentum for now to carry us. How are they going to do that? And at the same time, demand has grown considerably. Free bio on Ryan. California Cuts State Taxes on Cannabis Growth and Cultivation, Commercial Real Estate Mid-Year 2022: The Big Slowdown, State of the U.S. Property Market and Investing in a Turbulent World, Employee Benefit Plan Audit (ERISA Qualified Plans), Center for Individual and Organizational Performance, Environmental, Social and Governance Services (ESG), EisnerAmper - Wealth Management & Corporate Benefits, Forensic, Litigation & Valuation Services, Merger, Acquisition & Divestiture Services, Coding & Documentation Support & Assistance, Health Care Investor and Private Equity Services, Value-Based Services / Government Health Care, Technology Enabled Services for Health Care Companies, Special Purpose Acquisition Company (SPAC) Services, EA RESIG Real Estate Fund Administration Services, Media Content License Fees: Contract Compliance Measurement, EisnerAmper U.K. Financial Services Group, Governmental and Private COVID-19 Assistance Programs, Ryan Sievers Joins EisnerAmpers Real Estate Advisory Services Group, Lisa Knee Named a 2022 Woman of Influence in Real Estate, EisnerAmpers 2021 National Virtual Summit to Focus on Transformation Nation Driving Intelligent Growth. I say that because if I contrast that with retail sales, which is the black line on this slide, retail sales are still at or near record high levels despite consumers feeling so doer about things. In that sense, the Board of Governors of the Fed is drafting the dealer community to take part in the war effort by financing the war on Covid-19. A couple parts to it. EisnerAmper is the brand name under which EisnerAmper LLP and Eisner Advisory Group LLC, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards. And what I mean by that is since the pandemic, we have shifted more towards consuming goods and away from consuming services, which makes sense. As a consequence of that, I think it's going to be difficult to get back to the pre-pandemic average level of inflation, which is that dash line that I've superimposed on the graph. So I think they'll proceed cautiously. The last thing I want to back out of this is that fiscal stimulus because Again, I'm not a political person, but I think it's fair to say that the appetite to keep spending like that when inflation is already running at eight and a half percent, you're not going to find that across the political spectrum these days. I have one thing. As we keep putting more people to work, that is a lot more spending firepower that we can unleash into the economy.

The Fed is not really, or wasn't at least, designed to be economic superheroes, fixing all of the problems in the economy. Again, even in the 1970s, you will see a spike up in the 1970s and it starts to come down. Not traditional retailers or eCommerce, but a lot of organizations responsible for that. So if you are the Fed and you have a hammer and it's the only tool that you have, well, then you go around looking for nails to hammer down if that's the only tool that you have in your toolbox. I do not even have the most aggressive forecast on this. Again, the labor market is strong, consumer spending is strong, wage growth is healthy. But we really thank you so much. And that brings us to a point where I'm not wholly surprised to see inflation. And if you are even remotely involved or deal with the industrial market, it is at a pretty good place to play these days, which is maybe the easiest way that I can say that. And I would say we're probably at the beginning of this trend, not at the end of this trend. It might get a little bumpy. We have to do this differently.This is a whole-of-society effort where we need the young to re-image the future, understand the data of the vulnerable, offer novel solutions and re-connect the whole. Organizations themselves, businesses can say, "Well, maybe we don't need to hire as many people. And that in and of itself is bad enough, but that could certainly spill over into economic consequences in other parts of the world that could create this feedback loop that could actually exacerbate inflation.

How is consumption being financed? Because it's just not a very good, meaningful relationship. So the birth rate has now fallen below what's known as the replacement rate, which means as people, we're just not replacing ourselves with the subsequent generation. But this is akin to what the Fed is trying to do right now. That's not normal. So it's not so much that I think inflation in and of itself. For questions, contact the Project Organizers. And the way that I see that manifesting in the data is if I look at the difference between headline inflation, which includes all goods in services that we consume in the economy versus core inflation, which backs out things like food and energy because Not because people don't eat or consume energy. And that has knock on consequences for industrial space, for warehouse space, logistic space, distribution space because the pattern of goods migration is not the same if you are manufacturing is shipping from Asia than if you are from somewhere else in the world. Not surprisingly, a lot of it is coming from logistics companies who are responsible for moving goods around the world.