by Calculated Risk on 7/29/2010 02:26:00 PM

Home builder Ryland announced Q2 earnings today. From Briefing.com (ht Brian):

Ryland says that the big question from last quarter's conference call was what impact the expiration of the tax credit will have on the new home market. Says they found out the answer to that question in Q2, as sales slowed significantly. ... Says they knew there would be a slowdown in May once the event passed, but they didn't expect it to be as severe or prolonged as it's been...

by Calculated Risk on 7/29/2010 01:17:00 PM

Hotel occupancy is one of several industry specific indicators I follow ...

From HotelNewsNow.com: STR: Strong luxury results week ending 24 July

Overall [year over year], the industry’s occupancy increased 7.3 percent to 71.8 percent, ADR rose 1.3 percent to US$99.60, and RevPAR increased 8.6 percent to US$71.54.

The following graph shows the four week moving average for the occupancy rate by week for 2008, 2009 and 2010 (and a median for 2000 through 2007).

Click on graph for larger image in new window.

Notes: the scale doesn't start at zero to better show the change. The graph shows the 4-week average, not the weekly occupancy rate.

On a 4-week basis, occupancy is up 7.0% compared to last year (the worst year since the Great Depression) and 4.8% below the median for 2000 through 2007.

On a weekly basis this is the second week since summer 2008 with the occupancy rate above 70%. However last week was probably the peak for the occupancy rate for 2010 - although the 4-week average will move up over the next few weeks.

In 2009, the occupancy rate peaked at 67% in mid-July.

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

by Calculated Risk on 7/29/2010 11:00:00 AM

Note: Usually I don't post all the regional manufacturing surveys, however with the inventory adjustment over, export growth appearing to slow, and domestic consumer demand sluggish, these surveys might provide a hint of weakness in the manufacturing sector.

From the Kansas City Fed: Tenth District manufacturing activity rebounded moderately in July

Tenth District manufacturing activity rebounded moderately in July, and expectations for future production remained positive. However, plans for future hiring and capital spending were essentially flat. Price indexes were mostly unchanged.

This was a little more positive than the other regional reports that are all showing a slowdown in growth:

From the July 15th Empire State Manufacturing Survey: "[T]he pace of growth in business activity slowed substantially over the month."

From the Philly Fed on July 15th: Firms See Slower Growth Rate

From the Dallas Fed on July 26th: Texas Manufacturing Activity Remains Sluggish

From the Richmond Fed on July 27th: Manufacturing Activity Moderates in July; Expectations Slip

It appears overall that growth in the manufacturing sector moderated in July, and some of the internals are even weaker.

Toss in the weaker tone of in the Fed's Beige Book (released yesterday), and this raises the question: Is Fed Chairman Bernanke and the FOMC behind the curve (again)? In his testimony last week, Bernanke said:

My colleagues on the Federal Open Market Committee (FOMC) and I expect continued moderate growth ... Most FOMC participants expect real GDP growth of 3 to 3-1/2 percent in 2010

That seems pretty optimistic.

by Calculated Risk on 7/29/2010 08:30:00 AM

The DOL reports on weekly unemployment insurance claims:

In the week ending July 24, the advance figure for seasonally adjusted initial claims was 457,000, a decrease of 11,000 from the previous week's revised figure of 468,000. The 4-week moving average was 452,500, a decrease of 4,500 from the previous week's revised average of 457,000.
...
The advance number for seasonally adjusted insured unemployment during the week ending July 17 was 4,565,000, an increase of 81,000 from the preceding week's revised level of 4,484,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since January 2000.

The four-week average of weekly unemployment claims decreased this week by 4,500 to 452,500.

The dashed line on the graph is the current 4-week average.

The 4-week average of initial weekly claims has been at about the same level since December 2009 (eight months) and the 4-week average of 452,500 is high historically, and suggests a weak labor market.

by Calculated Risk on 7/28/2010 10:41:00 PM

For those interested, here is the paper by Alan Blinder and Mark Zandi that I mentioned last night: How the Great Recession Was Brought to an End