by Calculated Risk on 8/29/2014 02:06:00 PM

From HotelNewsNow.com: STR: US results for week ending 23 August

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 17-23 August 2014, according to data from STR.

In year-over-year measurements, the industry’s occupancy rate rose 5.0 percent to 70.6 percent. Average daily rate increased 5.4 percent to finish the week at US$116.13. Revenue per available room for the week was up 10.7 percent to finish at US$82.04.
emphasis added

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The occupancy rate has peaked for the year.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

The 4-week average of the occupancy rate is solidly above the median for 2000-2007, and is slightly above the level for the same week in 2000 (the previous high). 

Right now it looks like 2014 will be the best year since 2000 for hotels.   Since it takes some time to plan and build hotels, I expect 2015 will be a record year for hotel occupancy. Note: Smith Travel analysts say that supply growth will pickup next year, but remain relatively slow, "hotel supply growth in the United States is forecast to be 1% this year and 1.3% in 2015".

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

by Calculated Risk on 8/29/2014 09:59:00 AM

Click on graph for larger image.

The final Reuters / University of Michigan consumer sentiment index for August was at 82.5, up from the preliminary reading of 79.2, and up from 81.8 in July.

This was above the consensus forecast of 80.3. Sentiment has generally been improving following the recession - with plenty of ups and downs - and a big spike down when Congress threatened to "not pay the bills" in 2011.

by Calculated Risk on 8/29/2014 08:41:00 AM

The BEA released the Personal Income and Outlays report for July:

Personal income increased $28.6 billion, or 0.2 percent ... in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $13.6 billion, or 0.1 percent.
...
Real PCE -- PCE adjusted to remove price changes -- decreased 0.2 percent in July, in contrast to an increase of 0.2 percent in June. ... The price index for PCE increased 0.1 percent in July, compared with an increase of 0.2 percent in June. The PCE price index, excluding food and energy, increased 0.1 percent in July, the same increase as in June.

The following graph shows real Personal Consumption Expenditures (PCE) through July 2014 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

PCE is off to a slow start in Q3. NOTE: Graph corrected.

On inflation: The PCE price index increased 1.6 percent year-over-year, and at a 1.0% annualized rate in July. The core PCE price index (excluding food and energy) increased 1.5 percent year-over-year in July, and at a 1.1% annualized rate in July.

by Calculated Risk on 8/28/2014 07:46:00 PM

Friday:
• At 8:30 AM ET, Personal Income and Outlays for July. The consensus is for a 0.3% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.2%.

• At 9:45 AM, the Chicago Purchasing Managers Index for August. The consensus is for an increase to 56.0, up from 52.6 in July.

• At 9:55 AM, the Reuter's/University of Michigan's Consumer sentiment index (final for August). The consensus is for a reading of 80.3, up from the preliminary reading of 79.2, and down from the July reading of 82.5.

And on the GDP revision from the BEA: Gross Domestic Product, Second Quarter 2014 (Second Estimate); Corporate Profits, Second Quarter 2014 (Preliminary Estimate)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 4.0 percent. With this second estimate for the second quarter, the general picture of economic growth remains the same; the increase in nonresidential fixed investment was larger than previously estimated, while the increase in private inventory investment was smaller than previously estimated

Here is a Comparison of Second and Advance Estimates.

Below is a table comparing the contributions to the percent change for a few categories.  Less inventory, more investment ... a positive.

Revision: Contributions to Percent Change in Real Gross Domestic Product
	Advance	2nd Release	Revision
GDP, Percent change at annual rate:	4.0	4.2	0.2
PCE, Percentage points at annual rates:
Personal consumption expenditures	1.69	1.69	0.0
Investment, Percentage points at annual rates:
Nonresidential Structures	0.15	0.26	0.11
Equipment	0.40	0.59	0.19
Intellectual property products	0.14	0.17	0.03
Residential	0.23	0.22	-.01
Change in private inventories	1.66	1.39	-0.27
Trade, Percentage points at annual rates:
Net exports of goods and services	-0.61	-0.43	0.18
Government, Percentage points at annual rates:
Federal Government	-0.05	-0.06	-0.01
State and Local	0.35	0.33	-0.02

by Calculated Risk on 8/28/2014 02:15:00 PM

From the Kansas City Fed: Growth in Tenth District Manufacturing Activity Slowed Slightly

The Federal Reserve Bank of Kansas City released the August Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity slowed slightly, but producers’ expectations for future activity remained solid.

“Growth eased a bit from last month’s pace,” Wilkerson said. “Still, August represented the eighth straight month of expansion in the region, and plant managers remained generally optimistic.”
...
The month-over-month composite index was 3 in August, down from 9 in July and 6 in June. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (dashed green, through August), and five Fed surveys are averaged (blue, through August) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through July (right axis).

All of the regional surveys showed expansion in August, and it seems likely the ISM index will be in mid-to-high 50 range again this month.  The ISM index for August will be released Tuesday, September 2nd.