by Calculated Risk on 4/30/2009 11:40:00 AM

From CNBC: Chrysler To File for Bankruptcy, Sources Tell CNBC

Chrysler will file for bankruptcy ... two administration officials said Thursday.
...
A statement from President Barack Obama and members of his autos task force on Chrysler's situation and the auto industry is scheduled for 12 Noon EST.
...
The stance will likely set the tone for similar discussions with bondholders of General Motors which is now on the clock to restructure its operations by the end of May.

Here is the CNBC feed.

by Calculated Risk on 4/30/2009 11:06:00 AM

Note: Any reading below 100 shows contraction. So the improvement in the index to 97.7 means the business is still contracting, but contracting at a slower pace.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Improved as the Restaurant Performance Index Rose for the Third Consecutive Month

The outlook for the restaurant industry improved in March, as the National Restaurant Association’s comprehensive index of restaurant activity rose for the third consecutive month. The Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 97.7 in March, up 0.2 percent from February and 1.3 percent during the last three months.

“Although the RPI remained below 100 for the 17th consecutive month, which signals contraction, there are clear signs of improvement,” said Hudson Riehle, senior vice president of Research and Information Services for the Association. “Restaurant operators reported a positive six-month economic outlook for the first time in 18 months, and capital spending plans rose to a 9-month high.”
...
Restaurant operators also reported negative customer traffic levels for the 19th consecutive month in March.
...
Capital spending activity in the restaurant industry held relatively steady in recent months.
emphasis added

Click on graph for larger image in new window.

Unfortunately the data for this index only goes back to 2002.

The index values above 100 indicate a period of expansion; index values below 100 indicate a period of contraction.

Based on this indicator, the restaurant industry has been contracting since November 2007.

by Calculated Risk on 4/30/2009 09:27:00 AM

Here are some graphs of office, mall and lodging investment through Q1 2009 based on the underlying detail data released this morning by the BEA ...

Click on graph for larger image in new window.

This graph shows investment in lodging (based on data from the BEA) as a percent of GDP. The recent boom in lodging investment has been stunning. Lodging investment peaked at 0.33% of GDP in Q3 2008 and is now declining sharply (0.28% in Q1 2009).

I expect lodging investment to continue to decline through at least 2010, to perhaps one-third of the peak.

Note: prior to 1997, the BEA included Lodging in a category with a few other buildings. This earlier data was normalized using 1997 data, and is an approximation.

Investment in multimerchandise shopping structures (malls) peaked in Q4 2007 and is continuing to decline. As projects are completed, mall investment should fall much further.

As David Simon, Chief Executive Officer or Simon Property Group, the largest U.S. shopping mall owner said earlier this year:

"The new development business is dead for a decade. Maybe it’s eight years. Maybe it’s not completely dead. Maybe I’m over-dramatizing it for effect."

The third graph shows office investment as a percent of GDP since 1972. Office investment peaked in Q3 2008, and with the office vacancy rate rising sharply, office investment will probably decline at least through 2010.

Note: In 1997, the Bureau of Economic Analysis changed the office category. In the earlier years, offices included medical offices. After '97, medical offices were not included (The BEA presented the data both ways in '97).

The non-residential structures investment bust is here and will continue for some time.

by Calculated Risk on 4/30/2009 08:45:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending April 25, the advance figure for seasonally adjusted initial claims was 631,000, a decrease of 14,000 from the previous week's revised figure of 645,000. The 4-week moving average was 637,250, a decrease of 10,750 from the previous week's revised average of 648,000.
...
The advance number for seasonally adjusted insured unemployment during the week ending April 18 was 6,271,000, an increase of 133,000 from the preceding week's revised level of 6,138,000. The 4-week moving average was 6,076,000, an increase of 131,500 from the preceding week's revised average of 5,944,500.

Click on graph for larger image in new window.

The first graph shows weekly claims and continued claims since 1971.

The four week moving average is at 637,250, off 21,500 from the peak 3 weeks ago.

Continued claims are now at 6.27 million - the all time record.

Next week I'll add the chart that normalizes the data by covered employment.

This is another very weak report, however the decline in the four-week average of weekly claims suggests there is a reasonable chance that the peak in weekly claims has happened for this cycle.

by Calculated Risk on 4/29/2009 11:57:00 PM

From the NY Times: Chrysler Bankruptcy Looms as Deal on Debt Falters

Last-minute efforts by the Treasury Department to win over recalcitrant Chrysler debtholders failed Wednesday night, setting up a near-certain bankruptcy filing by the American automaker ... Chrysler was expected to seek Chapter 11 protection on Thursday ...

It sounds like the Administration expects a short bankruptcy. It will be interesting to see if the debtholders do better than the $2.25 billion they were offered.