by Calculated Risk on 6/04/2023 03:01:00 PM

From STR: STR: U.S. hotel results for week ending 27 May

As expected ahead of Memorial Day, U.S. hotel performance decreased from the previous week, according to STR‘s latest data through 27 May. Year-over-year comparisons were improved.

21-27 May 2023 (percentage change from comparable week in 2022):

• Occupancy: 66.8% (+0.6%)
• Average daily rate (ADR): US$156.63 (+2.2%)
• Revenue per available room (RevPAR): US$104.62 (+2.9%)
emphasis added

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 2023, black is 2020, blue is the median, and dashed light blue is for 2022.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is slightly above the median rate for the period 2000 through 2022 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate will increase during the summer travel season.

by Calculated Risk on 6/04/2023 08:11:00 AM

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report from economist Jiayi Xu: Weekly Housing Trends View — Data Week Ending May 27, 2023

• Active inventory growth slowed again, with for-sale homes up just 18% above one year ago. The number of homes for sale continues to grow, but compared to one year ago, the pace is slowing. As we have discussed previously, further slowing is likely ahead. Due to the limited housing inventory, many buyers have turned their attention towards newly constructed homes.
...
• New listings–a measure of sellers putting homes up for sale–were down again this week, by 20% from one year ago. The number of newly listed homes has been lower than the same time the previous year for the past 47 weeks. This week’s gap was smaller than last two weeks’, but the lack of new sellers is still a drag on home sales. In fact, this trend holds for all four regions in May, and the West saw the most significant decline in listing activities. Existing homeowners, benefiting from mortgage rates considerably lower than current rates, are reluctant to list their properties, leading to a lag in new listings.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory is still up year-over-year - from record lows - however, the YoY increase has slowed sharply recently.  

This was the smallest YoY increase since June 2022.

The recent trend suggests active inventory could be down YoY in late June or July!

by Calculated Risk on 6/03/2023 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

• Case-Shiller: National House Price Index Increased 0.7% year-over-year in March

• Inflation Adjusted House Prices 4.2% Below Peak

• Freddie Mac House Price Index Increased Slightly in April; Up 0.3% Year-over-year

• Lawler: Census Finally Releases 2020 Census Demographic Profile and Demographic and Housing Characteristics File

• Year-over-year Rent Growth Continues to Decelerate

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

You can subscribe at https://calculatedrisk.substack.com/

Most content is available for free (and no Ads), but please subscribe!

by Calculated Risk on 6/03/2023 08:11:00 AM

The key report scheduled for this week is the April trade balance.

----- Monday, June 5th -----
10:00 AM: the ISM Services Index for May.   The consensus is for a reading of 52.5, up from 51.9.

----- Tuesday, June 6th -----
8:00 AM ET: CoreLogic House Price index for April.

----- Wednesday, June 7th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: Trade Balance report for April from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum. 

The blue line is the total deficit, and the black line is the petroleum surplus, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $75.4 billion.  The U.S. trade deficit was at $64.2 Billion in March.

----- Thursday, June 8th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 238 thousand initial claims, up from 232 thousand last week.

12:00 PM: Q1 Flow of Funds Accounts of the United States from the Federal Reserve.

----- Friday, June 9th -----
No major economic releases scheduled.

by Calculated Risk on 6/02/2023 09:10:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Due to changes at the CDC, weekly cases are no longer updated.

After the first few weeks, the pandemic low for weekly deaths had been the week of July 7, 2021, at 1,690 deaths (until recently).  

For COVID hospitalizations, the previous low was 9,821 (until five weeks ago).

COVID Metrics
	Now	Week Ago	Goal
Hospitalized2	6,942	7,544	≤3,0001
Deaths per Week2	684	849	≤3501
1my goals to stop weekly posts, 2Weekly for Currently Hospitalized, and Deaths 🚩 Increasing number weekly for Hospitalized and Deaths ✅ Goal met.

Click on graph for larger image.

This graph shows the weekly (columns) number of deaths reported.

For deaths, I'm currently using 3 weeks ago for "now", since the most recent two weeks will be revised significantly.

by Calculated Risk on 6/02/2023 03:08:00 PM

The BEA released their estimate of vehicle sales for May this morning.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the May 2023 seasonally adjusted annual sales rate (SAAR).

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009.  Then heavy truck sales increased to a new all-time high of 570 thousand SAAR in April 2019.

Click on graph for larger image.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 308 thousand SAAR in May 2020.  

Heavy truck sales were at 558 thousand SAAR in May, up from 548 thousand in April, and up 20% from 464 thousand SAAR in May 2022.  

Usually, heavy truck sales decline sharply prior to a recession.   Sales were strong in May.

by Calculated Risk on 6/02/2023 11:59:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Year-over-year Rent Growth Continues to Decelerate

A brief excerpt:

Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand). This has been confirmed (mostly due to work-from-home), and also led to the supposition that household formation would slow sharply now (mostly confirmed) and that asking rents might decrease in 2023 on a year-over-year basis.
...
Here is a graph of the year-over-year (YoY) change for these measures since January 2015. Most of these measures are through April 2023, except CoreLogic is through May and Apartment List is through May 2023.
...
The CoreLogic measure is up 4.3% YoY in March, down from 5.0% in February, and down from a peak of 13.9% in April 2022.

The Zillow measure is up 5.3% YoY in April, down from 6.0% YoY in March, and down from a peak of 16.9% YoY in February 2022.

The ApartmentList measure is up 0.9% YoY as of May, down from 1.8% in April, and down from a peak of 18.3% YoY November 2021.
...
My view is it is likely that we will see a year-over-year decline in asking rents sometime in the next couple of months.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 6/02/2023 11:01:00 AM

The BEA released their estimate of vehicle sales for May this morning.

The BEA estimates sales of 15.05 million SAAR in May 2023 (Seasonally Adjusted Annual Rate), down 6.5% from the April sales rate, and up 19.6% from May 2022. 

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) and BEA's estimate for May (red).

The impact of COVID-19 was significant, and April 2020 was the worst month.  After April 2020, sales increased, and were close to sales in 2019 (the year before the pandemic).  

However, sales decreased in 2021 due to supply issues.  The "supply chain bottom" was in September 2021.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Vehicle sales are usually a transmission mechanism for Federal Open Market Committee (FOMC) policy, although far behind housing.  This time vehicle sales were more suppressed by supply chain issues and have picked up recently.

Sales in May were above the consensus forecast and sales in April were revised up.

by Calculated Risk on 6/02/2023 09:15:00 AM

The headline jobs number in the May employment report was above expectations, and employment for the previous two months was revised up by 93,000, combined.  The participation rate was unchanged, the employment population ratio declined slightly, and the unemployment rate increased to 3.7%.

Although the establishment survey (Current Employment Statistics - CES) showed a gain of 339 thousand jobs, the household survey (Current Population Survey - CPS) showed a loss of 310 thousand employed, pushing up the unemployment rate in May (based on CPS).

Leisure and hospitality gained 48 thousand jobs in May.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 349 thousand jobs since February 2020.  So, leisure and hospitality has now added back about 96% all of the jobs lost in March and April 2020. 

Construction employment increased 25 thousand and is now 320 thousand above the pre-pandemic level. 

Manufacturing employment decreased 2 thousand jobs and is now 199 thousand above the pre-pandemic level.

Earlier: May Employment Report: 339 thousand Jobs, 3.7% Unemployment Rate

In May, the year-over-year employment change was 4.06 million jobs.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 participation rate was increased in May to 83.4% from 83.3% in April, and the 25 to 54 employment population ratio decreased to 80.7% from 80.8% the previous month.

Both are slightly above the pre-pandemic levels and suggest all of the prime age workers have returned to the labor force.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.3% YoY in May. 

Year-over-year wage growth will likely slow further over the next couple of months since wage growth was strong in June and July 2022.

Part Time for Economic Reasons

From the BLS report:

"The number of persons employed part time for economic reasons, at 3.7 million, changed little in May. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons decreased in April to 3.739 million from 3.903 million in April. This is below pre-recession levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 6.7% from 6.6% in the previous month. This is down from the record high in April 22.9% and up slightly from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is below the level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.188 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.156 million the previous month.

This is at pre-pandemic levels.

Summary:

The headline monthly jobs number was well above expectations, and employment for the previous two months was revised up by 93,000, combined.   

Overall, this was another strong employment report, however, the unemployment rate increased due to fewer people employed in the household survey.

by Calculated Risk on 6/02/2023 08:41:00 AM

From the BLS:

Total nonfarm payroll employment increased by 339,000 in May, and the unemployment rate rose by 0.3 percentage point to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, government, health care, construction, transportation and warehousing, and social assistance.
...
The change in total nonfarm payroll employment for March was revised up by 52,000, from +165,000 to +217,000, and the change for April was revised up by 41,000, from +253,000 to +294,000. With these revisions, employment in March and April combined is 93,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 339 thousand in May.  Private payrolls increased by 283 thousand, and public payrolls increased 56 thousand.

Payrolls for March and April were revised up 93 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In May, the year-over-year change was 4.06 million jobs.  Employment was up significantly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate was unchanged at 62.6% in May, from 62.6% in April. This is the percentage of the working age population in the labor force.

The Employment-Population ratio declined to 60.3% from 60.4% (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate increased in May to 3.7% from 3.4% in April.

This was well above consensus expectations; and March and April payrolls were revised up by 93,000 combined.  

I'll have more later ...