onomy is nearing a bottom and is expected to soon begin a slow recovery, but commercial real estate remains a giant concern, Atlanta Fed President and CEO Dennis P. Lockhart [link=http://www.frbatlanta.org/invoke.cfm?objectid=989FF081-5056-9F12-12D094B31A6E064A&method=display][u]told[/u][/link] the Rotary Club of Nashville Monday. Noting an abundance of commercial real estate financings coming due in 2009, 2010 and 2011, Lockhart said ‘banks generally have no appetite to roll over loans on properties that have lost value in the recession.’ "Refinancing problems will not directly affect [gross domestic product (GDP)] – it's commercial construction that factors into GDP – but I'm concerned problems in commercial real estate finance could adversely affect the otherwise improving banking and insurance sectors," he told the club. The GDP fell slightly in the second quarter, representing "substantial progress" compared to the annualized contraction of 5.5% in the first quarter, Lockhart said. The Atlanta Fed president also touched on the recent labor market report, which showed unemployment hitting a 26-year high of 9.5% in June. Calling the data "disappointing," Lockhart added that employment trends typically lag broader economic improvements. SOURCE: Atlanta Federal
