by Calculated Risk on 10/15/2009 01:21:00 PM

From HotelNewsNow.com: New Orleans leads increases in STR weekly numbers

Overall, in year-over-year measurements, the industry’s occupancy fell 5.4 percent to end the week at 59.8 percent. ADR dropped 7.0 percent to finish the week at US$99.21. RevPAR for the week decreased 12.0 percent to finish at US$59.28.

Click on graph for larger image in new window.

This graph shows the occupancy rate by week for each of the last four year (2006 through 2009 labeled by start of month).

This shows the distinct seasonal pattern, with occupancy higher in the summer (because of leisure travel), and lower on certain holidays. This also shows that hotels are in two year occupancy slump. The year-over-year comparisons are easier now since business travel fell off a cliff last October. Comparing to the same week two years ago, occupancy rates are off over 12%.

Notes: the scale doesn't start at zero to better show the change. Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com. Thanksgiving was late in 2008, so the dip doesn't line up with the previous years.

And more on business travel:

First, from MarketWatch on business travel: Southwest Airlines CEO: the worst is not behind us

Chief Executive Gary Kelly said Thursday that the worst was not yet behind the low-cost carrier because of higher energy prices and the lack of business travel.

“We have significant demand at our discounted pricing levels. We have very weak demand at our full-fare levels.”
Southwest Airlines CEO Gary Kelly, Oct 15, 2009

by Calculated Risk on 10/15/2009 11:25:00 AM

Both the Philly Fed Index and NY Fed index were positive today on manufacturing conditions in those regions ...

Here is the Philadelphia Fed Index released today: Business Outlook Survey.

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell from a reading of 14.1 in September to 11.5 this month. The index has now remained positive for three consecutive months following a nearly continuous string of negative readings since the beginning of the recession in December 2007.
...
Labor market conditions remain weak, although there are signs that widespread declines have moderated considerably. The current employment index, although still negative, increased eight points, from ‐14.3 to ‐6.8, its highest reading since September 2008.

Click on graph for larger image in new window.

This graph shows the Philly index for the last 40 years.

The index has been positive for three months now, after being negative for 19 of the previous 20 months. Employment is still weak.

From the NY Fed: Empire State Manufacturing Survey

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved significantly in October. The general business conditions index climbed 16 points to 34.6, its highest level in five years. The new orders index rose 11 points, and the shipments index shot up 30 points, to 35.1. Both employment indexes were positive for the first time in more than a year.

And a two miscellaneous stories:

From Reuters: Capital One credit card defaults rise in September

... Capital One said the annualized net charge-off rate ... for U.S. credit cards had risen to 9.77 percent in September from 9.32 percent in August.

From the Sacramento Bee: California Senate approves $10,000 tax credit for new-home buyers (ht Brad)

The Senate voted 35-1 to reauthorize the use of $30 million in credits ... That should allow the state to give tax credits to about 4,300 more buyers of new unoccupied homes ... Eligible buyers would get a maximum of $3,333 in credits for each of the next three years.

by Calculated Risk on 10/15/2009 09:20:00 AM

From RealtyTrac: U.S. Foreclosure Activity Increases 5 Percent in Q3

RealtyTrac® ... today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.

Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.

“Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”

by Calculated Risk on 10/15/2009 09:01:00 AM

From the BLS: Consumer Price Index Summary

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in September, the Bureau of Labor Statistics reported today. The increase was less than the 0.4 percent rise in August. The index has decreased 1.3 percent over the last 12 months on a not seasonally adjusted basis.

And on rents:

The increase occurred despite declines in the indexes for rent and owners' equivalent rent, the first decreases in those indexes since 1992.

The decrease in OER was at an annual rate of 1.7%. And rents will continue to fall for some time.

Also, it is now official, there will be no increase in Social Security benefits next year (see: Social Security: No Increase to 2010 Benefits or Maximum Contribution Base)

by Calculated Risk on 10/15/2009 08:30:00 AM

The DOL reports weekly unemployment insurance claims decreased to 514,000:

In the week ending Oct. 10, the advance figure for seasonally adjusted initial claims was 514,000, a decrease of 10,000 from the previous week's revised figure of 524,000. The 4-week moving average was 531,500, a decrease of 9,000 from the previous week's revised average of 540,500.
...
The advance number for seasonally adjusted insured unemployment during the week ending Oct. 3 was 5,992,000, a decrease of 75,000 from the preceding week's revised level of 6,067,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims decreased this week by 9,000 to 531,500, and is now 127,250 below the peak in April.

Initial weekly claims have peaked for this cycle. The key question is: Will claims continue to decline sharply, like following the recessions in the '70s and '80s, or will claims plateau for some time at an elevated level, as happened during the jobless recoveries in the early '90s and '00s?

The level is still high - indicating continuing job losses - and the four-week average of initial weekly claims will probably have to fall below 400,000 before total employment stops falling.