by Calculated Risk on 12/03/2009 11:57:00 AM

From HotelNewsNow.com: Luxury leads occupancy increases in STR weekly numbers

Overall, in year-over-year measurements, the industry’s occupancy fell 1.7 percent to end the week at 40.7 percent. Average daily rate dropped 6.7 percent to finish the week at US$84.81. Revenue per available room for the week decreased 8.4 percent to finish at US$34.54.

Click on graph for larger image in new window.

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

Notes: the scale doesn't start at zero to better show the change. Thanksgiving was later in 2008 and 2009, so the dip doesn't line up with the previous years.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

This is a two year slump for the hotel industry. Although occupancy is off 1.7% compared to 2008, occupancy is off about 14% compared to Thansgiving week in 2006 and 2007.

The good news is the occupancy rate is at about the same level as 2008 (off just 1.7 percent). The bad news is this is a very low occupancy rate - 2009 will be the lowest since the Great Depression - and this is still pushing down room rates.

by Calculated Risk on 12/03/2009 10:04:00 AM

From the Institute for Supply Management: November 2009 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector contracted in November after two consecutive months of expansion, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Worldwide. "The NMI (Non-Manufacturing Index) registered 48.7 percent in November, 1.9 percentage points lower than the 50.6 percent registered in October, indicating contraction in the non-manufacturing sector after two consecutive months of expansion. The Non-Manufacturing Business Activity Index decreased 5.6 percentage points to 49.6 percent, reflecting contraction after three consecutive months of growth. The New Orders Index decreased 0.5 percentage point to 55.1 percent, and the Employment Index increased 0.5 percentage point to 41.6 percent. The Prices Index increased 4.8 percentage points to 57.8 percent in November, indicating an increase in prices paid from October. According to the NMI, six non-manufacturing industries reported growth in November. Respondents' comments remain cautious about business conditions and reflect concern over the length of time for economic recovery."
...
Employment activity in the non-manufacturing sector contracted in November for the 22nd time in the last 23 months. ... Three industries reported increased employment, 11 industries reported decreased employment, and four industries reported unchanged employment compared to October. Comments from respondents include: "Permanent and seasonal layoffs" and "Some reduction in workforce due to slow second- and third-quarter sales."
emphasis added

This is a grim report. According to this survey, the service sector contracted in November, and employment also contracted at about the same rate as in October.

by Calculated Risk on 12/03/2009 10:01:00 AM

Fed Chairman Ben Bernanke's confirmation hearing before the Senate Banking Committee.

Here is the CNBC feed.

And a live feed from C-SPAN.

Prepared Testimony: Confirmation hearing

by Calculated Risk on 12/03/2009 08:36:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending Nov. 28, the advance figure for seasonally adjusted initial claims was 457,000, a decrease of 5,000 from the previous week's revised figure of 462,000 [revised from 466,000]. The 4-week moving average was 481,250, a decrease of 14,250 from the previous week's revised average of 495,500.
...
The advance number for seasonally adjusted insured unemployment during the week ending Nov. 21 was 5,465,000, an increase of 28,000 from the preceding week's revised level of 5,437,000. The 4-week moving average was 5,541,500, a decrease of 75,750 from the preceding week's revised average of 5,617,250.

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 14,350 to 481,250. This is the lowest level since last November.

Although falling, the level is still high suggesting continuing job losses.

by Calculated Risk on 12/03/2009 12:00:00 AM

From the WSJ Real Time Economics: The Fed’s Market’s Guy Eyes Asset Sales and Rate Increases (ht Paul)

Brian Sack, who runs the markets group of the Federal Reserve Bank of New York, spoke to the Money Marketeers of New York University ...

Mr. Sack’s group estimates that the Fed’s purchases of $300 billion in long-term Treasury securities earlier this year helped to push yields on 10-year Treasury notes down by about half a percentage point. ... Purchases of mortgage backed securities, he says, pushed those rates down by a full percentage point.

This is significantly higher than my estimate of 35 to 50 bps and suggest mortgage rates might rise sharply next spring (the MBS purchase program is scheduled to conclude by the end of the first quarter of 2010).

Update: Apparently Sack's might have been referring to the decline from the peak of the panic (not clear from the brief excerpt). Of course the purchases started in January - months after the peak of the panic - and that isn't what people are interested in.