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NATIONAL ECONOMIC OUTLOOK AND INDICATORS The U.S. economy ended the summer on a down note, with several data releases showing economic activity slowing as tariffs came into effect and as businesses absorbed higher costs by easing up on hiring. The front -loading of imports before the imposition of tariffs yielded a mild contraction in the first quarter of the year, with gross domestic product falling by 0.5%. The economy rebounded by 3.3% in Q2 as imports retreated and as consumer spending remained resilient. Consumer spending, the primary driver of economic growth, has also been slowing, with a 2.1 % increase over the prior year in July in inflation -adjusted terms, the smallest annual gain since February 2024. Middle- and lower -income households have been pulling back on purchases as lower -income consumers, in particular, have become more reliant on borrowing, straining budgets as interest costs on debt have surged. Delinquency rates of credit card balances and personal loans, while no longer rising, have remained elevated. On the other hand, the balance sheets of higher -income households are solid, with asset and home price gains adding to household wealth and allowing these consumers to continue to spend. However, recent downward revisions to jobs data have left market observers more pessimistic about the economy. The Labor Department reported that employers added 73,000 jobs in July, far below expectations, and revised job gains in the previous two months by 258,000, a surprise for observers who had earlier been celebrating the labor market's resilience in the face of significant policy uncertainty in the first half of the year. Source: Bureau of Economic Analysis and CoStar. The following table illustrates the most recent unemployment rates. April May June July National 4.2% 4.2% 4.1% 4.2% Florida 3.7% 3.7% 3.7% 3.7% Miami, Miami Beach, Kendall 2.7% 2.7% 2.4% 2.8% Fort Lauderdale MSA 3.2% 3.3% 3.7% 3.8% West Palm Beach - Boca MSA 3.4% 3.4% 3.9% 4.1% Source: US Department of Labor Inflation has slowed from its cycle peak in 2022 but remains above the Federal Reserve's target. The personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, moved higher in the past three months, reaching 2.6%, while core inflation, which excludes energy costs that have been easing this year, rose to 2.9% in July, suggesting that the added costs from higher tariffs are beginning to appear in inflation data. During second-quarter earnings calls, importers reported tolerating thinner margins and absorbing some costs rather than raising prices and potentially losing customers. Still, analysts expect consumers will likely face higher prices in future months. 10 548