The Federal Reserve lowered interest rates last week, as expected. There were no enthusiastic fans singing the Baby Shark song, but the Federal Open Market Committee’s decision was well received.
Reuters reported, “Gaps between market expectations and the Fed’s own outlook have been wide at times this year, a source of concern for policymakers who don’t want to kowtow to markets, but also don’t want to surprise or disrupt them. But, the two are now roughly in line with the idea that the Fed is on hold and the economy continuing to chug along, a fact highlighted by data showing 128,000 jobs were created in October…”
Last week’s unemployment report was full of good news. It reported job gains and moderate pay increases, according to Barron’s, but there was a counterintuitive twist. The unemployment rate increased even though the economy added new jobs. That was good news, too, because it meant more people are returning to the workforce.
The only bad news was found in manufacturing. The October ISM manufacturing index ticked higher, but remains in contraction territory. CNBC reported, “Manufacturing has been at the heart of the economy’s sluggishness, with a drop in business investment a big reason for the third quarter’s sluggish 1.9 percent [economic] growth pace.”
Barron’s attributed softness in manufacturing to the ongoing U.S.-China trade war.
By the end of the day on Friday, the Standard & Poor’s 500 Index had closed at a record high three times in five days. The Nasdaq Composite also reached a record high.
What Will We Do With Parking Garages
As the popularity of ride-sharing services and personal transportation options (like scooters and bicycles) grows, the need for cars in urban areas may diminish.
The arrival of autonomous vehicles could reduce demand even further.
Pew Research explained, “By 2030, 15 percent of new cars sold will be totally autonomous, according to one estimate. One in 10 will be shared. And, as it becomes easier for people to summon shared or autonomous cars when they need them, fewer people will want to own their own vehicle, meaning fewer cars overall.”
So, what’s going to happen to all of the parking garages?
There are a lot of interesting ideas about how parking garages might be repurposed. Some companies plan to reserve the spaces for autonomous vehicles. Others are remodeling garages to accommodate businesses and services.
For example, one company is buying properties with the intention of turning them into “commercial kitchens for delivery-only restaurants and other consumer services.” Other possibilities include:
- Recreational areas
- Movie theaters
- E-commerce distribution centers
- Flood protection areas
- Urban farms
- Apartment buildings
The co-CEO of an architecture and design firm told Axios News, “An obvious and functional challenge we face is that these structures were not originally designed for human habitation. These spaces often require us to raise the floor height, level the floors between ramps and incorporate design techniques that bring natural light into the space.”
Redeveloping parking garages may be challenging and costly, but it could create opportunities for investors.
Weekly Focus – Think About It
“Before you become too entranced with gorgeous gadgets and mesmerizing video displays, let me remind you that information is not knowledge, knowledge is not wisdom, and wisdom is not foresight. Each grows out of the other, and we need them all.”
--Arthur C. Clarke, Science fiction writer and futurist
https://www.barrons.com/articles/what-the-perfect-jobs-report-means-51572627916 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/11-04-19_Barrons-This_Perfect_Jobs_Report_Looks_Like_a_Game-Changer-Footnote_2.pdf)