Economy Watch: Income, Spending Up for Americans in July

Are lenders a bit nervous about the direction of commercial real estate?

Are lenders a bit nervous about the direction of commercial real estate? Possibly. The Federal Reserve reported on Tuesday its Q2 survey of lenders found that, on balance, banks tightened their standards on commercial and industrial (business) loans, as well as commercial real estate loans. Standards for residential mortgages didn’t change much.

The survey (formally called the July 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices) also found that while demand for business loans was little changed over the quarter, demand for CRE loans strengthened during the second quarter. Developers still want to be in the game, in other words, but lenders aren’t quite as gung-ho.

Separately, there was news on Tuesday that retailers and their landlords always like to hear: Personal income increased $29.3 billion (0.2 percent) in June, according to the Bureau of Economic Analysis. Disposable personal income—the best kind, which you can go out and spend right away—increased $24.6 billion (also 0.2 percent). And spend Amercians did: personal consumption expenditures (PCE), as the government calls it, increased $53 billion (0.4 percent) for the month.

Real PCE, a metric that takes into account the still-low level of inflation, increased 0.3 percent for the month, noted the BEA. The PCE price index (a measurement of inflation) increased 0.1 percent. Excluding food and energy, the PCE price index also increased 0.1 percent. In short, inflation’s mostly tame.