Analysts at Fitch Ratings suspect the next big round of bad news for banks will come from commercial real estate loans. "Virtually all major property types [multifamily, office, retail and industrial] are suffering from rising vacancies and declining rents," a recent Fitch report warned. The ratings agency is performing its own analysis of U.S. banks' exposure to debt secured by commercial property.
The rate of hiring is increasing slightly at discount stores, grocers and restaurant chains, compared with earlier in the year, according to a study. Though hiring is still slow, the increase indicates more confidence from individual managers.
The commercial real estate sector is not expected to get help in the form of a big government rescue package. "Housing probably gets more attention because it's a big part of household wealth and, at its peak, it was a much bigger portion of the economy than [commercial] real estate," says Abiel Reinhart, an economist at JPMorgan Chase.