by Calculated Risk on 9/11/2014 07:43:00 PM

First, from Merrill Lynch:

We have revised up our forecast for 3Q GDP growth to 3.5% from 3.0% and 2Q tracking has moved up to 4.8%, from 4.0%.

Some of this is a bounce back from the -2.1% decline in Q1 GDP (on a seasonally adjusted annual rate basis, SAAR).

Friday:
• At 8:30 AM ET, Retail sales for August will be released. The consensus is for retail sales to increase 0.4% in August, and to increase 0.3% ex-autos.

• At 9:55 AM, the Reuter's/University of Michigan's Consumer sentiment index (preliminary for September). The consensus is for a reading of 83.1, up from 82.5 in August.

• Also at 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for July. The consensus is for a 0.5% increase in inventories.

by Calculated Risk on 9/11/2014 04:32:00 PM

From DataQuick: Southland Home Sales Sputter; Median Sale Price Hits 80-Month High

A total of 18,796 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 7.7 percent from 20,369 sales in July, and down 18.5 percent from 23,057 sales in August 2013, according to CoreLogic DataQuick data. ...
...
Foreclosure resales – homes foreclosed on in the prior 12 months – represented 5.0 percent of the Southland resale market last month. That was down from 5.2 percent the prior month and down from 7.0 percent a year earlier. In recent months the foreclosure resale rate has been the lowest since early 2007. In the current cycle, foreclosure resales hit a high of 56.7 percent in February 2009.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 5.9 percent of Southland resales last month. That was up slightly from 5.8 percent the prior month and down from 11.5 percent a year earlier.

Absentee buyers – mostly investors and some second-home purchasers – bought 23.5 percent of the Southland homes sold last month. That tied the July level as the lowest absentee share since December 2010, when 23.4 percent of homes sold to absentee buyers. Last month’s figure was down from 26.7 percent a year earlier. The peak was 32.4 percent in January 2013, while the monthly average since 2000, when the CoreLogic DataQuick absentee data begin, is about 19 percent.
emphasis added

From DataQuick: Bay Area Home Sales Slow in August; Prices Increases Ease Back

A total of 7,578 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 10.6 percent from 8,474 in July and down 12.0 percent from 8,616 in August last year, according to CoreLogic DataQuick data. ...
...
Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 2.9 percent of resales, up from 2.7 percent the month before, and down from 4.3 percent a year ago. Foreclosure resales in the Bay Area peaked at 52.0 percent in February 2009, while the monthly average over the past 17 years is 9.8 percent, CoreLogic DataQuick reported.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 3.8 percent of Bay Area resales last month. That was down from an estimated 4.0 percent in July and down from 7.6 percent a year earlier.

Last month absentee buyers – mostly investors – purchased 18.4 percent of all Bay Area homes. That was down from a revised 18.9 percent the prior month, and down from 20.3 percent a year earlier.
emphasis added

A few key year-over-year trends: 1) declining distressed sales (about half as many this year as in August 2013), 2) generally declining investor buying, and 3) declining total sales.  For August, it looks like non-distressed sales were also down significantly.

by Calculated Risk on 9/11/2014 01:55:00 PM

From HotelNewsNow.com: STR: US results for week ending 6 September

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 31 August through 6 September 2014, according to data from STR.

In year-over-year measurements, the industry’s occupancy rate rose 4.5 percent to 59.0 percent. Average daily rate increased 5.9 percent to finish the week at US$108.87. Revenue per available room for the week was up 10.6 percent to finish at US$64.20.
emphasis added

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

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

There is always a dip in occupancy after the summer (less leisure travel), and business travel should pick up soon.

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 at about the level as 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 9/11/2014 12:05:00 PM

From Brett LoGiurato at Business Insider: Goldman Is Now Saying That Q2 GDP Growth Was Absolutely Massive

Goldman Sachs revised its estimate of second-quarter GDP growth to 4.7% on Thursday, based on new data from the Census Bureau's Quarterly Services Survey (QSS).

Stronger-than-expected healthcare spending growth led to the revised Goldman estimate of 4.7%, which was up 0.5% from the Bureau of Economic Analysis' second advance-estimate of 4.2%.

Here is the Q2 Quarterly Services Press Release

Health care and social assistance The estimate of U.S. health care and social assistance revenue for the second quarter of 2014, not adjusted for seasonal variation, or price changes, was $565.6 billion, an increase of 3.0 percent (± 0.9%) from the first quarter of 2014 and up 3.7 percent (± 0.9%) from the second quarter of 2013. The fourth quarter of 2013 to first quarter of 2014 percent change was not revised from -2.0 percent (± 0.8%).

The third estimate of Q2 GDP will be released on Friday, September 26th. Some of the Q2 GDP increase was a bounce back from the weather impacted Q1.

by Calculated Risk on 9/11/2014 08:35:00 AM

The DOL reports:

In the week ending September 6, the advance figure for seasonally adjusted initial claims was 315,000, an increase of 11,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 302,000 to 304,000. The 4-week moving average was 304,000, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 500 from 302,750 to 303,250.

There were no special factors impacting this week's initial claims.

The previous week was revised up to 304,000.

The following graph shows the 4-week moving average of weekly claims since January 1971.

Click on graph for larger image.


The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 304,000.

This was above the consensus forecast of 300,000 and in the normal range for an economic expansion.