by Calculated Risk on 9/11/2015 11:41:00 AM

Note: Some of the year-over-year improvement last week was due to the shift in timing of Labor Day.

From HotelNewsNow.com: STR: US results for week ending 5 September

The U.S. hotel industry recorded positive results in the three key performance measurements during the week of 30 August through 5 September 2015, according to data from STR, Inc.

In year-over-year measurements, the industry’s occupancy increased 7.5% to 63.6%. Average daily rate for the week was up 6.6% to US$115.73. Revenue per available room increased 14.6% to finish the week at US$73.58.
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.  The occupancy rate is now declining following the summer travel season.

The red line is for 2015, dashed orange is 2014, blue is the median, and black is for 2009 - the worst year since the Great Depression for hotels.  Purple is for 2000.

Special Note: I added 2001 (yellow) to show the impact of 9/11/2001 on hotel occupancy.  Occupancy was already down in 2001 due to the recession, and really collapsed following 9/11.

For 2015, the 4-week average of the occupancy rate is solidly above the median for 2000-2007, and above last year.

Right now 2015 is above 2000 (best year for hotels), and 2015 will probably be the best year ever for hotels.

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

by Calculated Risk on 9/11/2015 10:02:00 AM

The preliminary University of Michigan consumer sentiment index for September was at 85.7, down from 91.9 in August.

This was below the consensus forecast of 91.0.


Click on graph for larger image.

by Calculated Risk on 9/10/2015 07:33:00 PM

Merrill Lynch expects Q2 GDP to be revised up from 3.7% SAAR:

The Census Bureau released the 2Q Quarterly Services Survey, revealing a stronger trend for healthcare services spending. Feeding this into our tracking model added 0.2pp to 2Q GDP tracking, leaving us at 3.9% qoq saar. Meanwhile, 3Q tracking was unchanged at 2.9%.

Friday:
• At 8:30 AM ET, the Producer Price Index for August from the BLS. The consensus is for a 0.2% decrease in prices, and a 0.1% increase in core PPI.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for September). The consensus is for a reading of 91.0, down from 91.9 in August.

• At 2:00 PM, the Monthly Treasury Budget Statement for August.

by Calculated Risk on 9/10/2015 02:58:00 PM

A brief excerpt from a research note by Goldman Sachs economist Alec Phillips:

[T]he political environment at the moment seems ripe for fiscal conflict. We are still closer to the last election than the next one, and it is not a coincidence that recent major fiscal disruptions occurred in 2011 and 2013—odd years—when upcoming elections were still more than a year off. In the 2013 experience, public sentiment toward Republicans dropped sharply during and after the shutdown (Gallup’s Republican favorability measure hit a 20-year low), but a year later Republicans won the majorities in the House and Senate. Some lawmakers may conclude from this that voters’ memories are short and the political price for a shutdown more than a year before the next election is low.

As we've discussed, these stunts happen in odd years, and then the voters forget by the next election.

[W]hile the probability of a shutdown of some kind seems to us to be approaching 50%, we think the probability of a shutdown that has a significant effect on the financial markets or real economy is much lower, for two reasons. First, unlike the 2013 shutdown, which coincided with the deadline to raise the debt limit, the next deadline to raise the debt limit is unlikely to be reached until at least mid-November. ... shutdowns that overlapped with debt limit deadlines—the 1990 and 2013 shutdowns—have tended to result in a stronger reaction in financial markets than other shutdowns where the debt limit deadline was not about to be reached.
emphasis added

This possible shutdown isn't related to the "debt ceiling" (incorrectly named - actually about paying the bills), so hopefully this will be resolved. If not, some data releases will probably be delayed (September employment report, etc).

by Calculated Risk on 9/10/2015 11:15:00 AM

In addition to Case-Shiller, and CoreLogic, I'm also watching the FNC, Zillow and several other house price indexes.

FNC released their July 2015 index data today.  FNC reported that their Residential Price Index™ (RPI) indicates that U.S. residential property values increased 0.2% from June to July (Composite 100 index, not seasonally adjusted). 

The 10 city MSA was unchanged in July (NSA), the 20-MSA RPI increased 0.1%, and the 30-MSA RPI was unchanged. These indexes are not seasonally adjusted (NSA), and are for non-distressed home sales (excluding foreclosure auction sales, REO sales, and short sales).

Notes: In addition to the composite indexes, FNC presents price indexes for 30 MSAs. FNC also provides seasonally adjusted data.

The year-over-year (YoY) change was smaller in July than in June, with the 100-MSA composite up 5.5% compared to July 2014.

The index is still down 15.2% from the peak in 2006 (not inflation adjusted).

Click on graph for larger image.

This graph shows the year-over-year change based on the FNC index (four composites) through July 2015. The FNC indexes are hedonic price indexes using a blend of sold homes and real-time appraisals.

Most of the other indexes are also showing the year-over-year change in the 5% range. For example, Case-Shiller was up 4.5% in June, CoreLogic was up 6.9% in July.

Note: The July Case-Shiller index will be released on Tuesday, September 29th.