by Calculated Risk on 9/17/2010 09:55:00 AM

From MarketWatch: U.S. Sept. consumer sentiment falls to 66.6

The UMich index declined to 66.6 in September - the lowest level since August 2009 -- from 68.9 in August.

Click on graph for larger image in new window.

Consumer sentiment is a coincident indicator - and this is further evidence of a sluggish economy.

This was a big story in July when consumer sentiment collapsed to the lowest level since late 2009. Now it is even lower ...

by Calculated Risk on 9/17/2010 08:30:00 AM

From the BLS report on the Consumer Price Index this morning:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. ... Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment.
...
The index for all items less food and energy was unchanged in August ... Over the last 12 months, the index for all items less food and energy rose 0.9 percent ...

The index for owners' equivalent rent was unchanged and the lodging away from home index fell 1.3 percent....

The general disinflationary trend continues - core CPI is up less than 1% over the last year - and with all the slack in the system (especially the 9.6% unemployment rate), the various measures of inflation will probably stay low or even fall further.

Note: I'll post a graph later after the Cleveland Fed releases the 16% trimmed CPI (another measure of inflation).

by Calculated Risk on 9/16/2010 08:38:00 PM

Here are the European bond spreads from the Atlanta Fed weekly Financial Highlights released today (graph as of Sept 15th):

Click on graph for larger image in new window.

From the Atlanta Fed:

European bond spreads have risen and remain elevated since the August FOMC meeting.

A quiet week, but definitely still worth watching ... especially with all the currency manipulation going on.

by Calculated Risk on 9/16/2010 04:35:00 PM

Note: Usually I don't watch this very closely, but right now I'm looking for signs of a slowdown in manufacturing. Eventually a watched pot does boil ...

By request - now that the Empire State and Philly Fed manufacturing surveys for September have been released - here is an update to the graph I posted last month:

Click on graph for larger image in new window.

For this graph I averaged the New York and Philly Fed surveys (dashed green, through September), and averaged five surveys including New York, Philly, Richmond, Dallas and Kansas City (blue, through August).

The Institute for Supply Management (ISM) PMI (red) is through August (right axis).

Last month, when the ISM survey came in slightly better than expected, I wrote: "Based on this graph, I'd expect either the Fed surveys to bounce back in September - or the ISM to decline."

So far there has been little "bounce back" in the Fed surveys.

by Calculated Risk on 9/16/2010 01:57:00 PM

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

From HotelNewsNow.com: STR: US hotel industry has bumpy week

The U.S. hotel industry reported a decrease in average daily rate ADR for the first time in 13 consecutive weeks for the week of 5-11 September 2010, according to data from STR.

ADR fell 2.0% to US$92.84, occupancy increased 2.7% to 54.2%, and revenue per available room ended the week virtually flat with a 0.7% increase to US$50.32.

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 7.2% compared to last year (the worst year since the Great Depression) and 5.1% below the median for 2000 through 2007.

The occupancy rate has fallen below the levels of 2008 again - and 2008 was a tough year for the hotel industry!

Important: Even with the occupancy rate close to 2008 levels, 2010 is a much more difficult year. The average daily rate (ADR) is off 14% from 2008 levels - so even with the similar occupancy rates, hotel room revenue is off sharply.

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

by Calculated Risk on 9/16/2010 11:57:00 AM

A few articles:

Via the WSJ Treasury Secretary Timothy Geithner: Testimony on China

It is the judgment of the IMF that, in view of the very limited movement in the Chinese currency, the rapid pace of productivity and income growth in China relative to its trading partners, the size of its current account surplus, and the substantial level of ongoing intervention in exchange markets to limit the appreciation of the Chinese currency, the renminbi is significantly undervalued.

We share that assessment. We are concerned, as are many of China’s trading partners, that the pace of appreciation has been too slow and the extent of appreciation too limited.

We will take China’s actions into account as we prepare the next Foreign Exchange Report, and we are examining the important question of what mix of tools, those available to the United States as well as multilateral approaches, might help encourage the Chinese authorities to move more quickly.

From Joseph Pisani at CNBC: Foreclosures Rise; Repossessions Set Record

Bank repossessions ... increased about 3 percent from the month before to 95,364, a record high. At the same time the number of properties that received default notices—the first step in the foreclosure process—decreased 1 percent from a month ago and fell 30 percent from a year ago ...

From Erik Eckholm at the NY Times: Poverty Rate Rose Sharply in 2009, Says Census Bureau

Forty-four million people in the United States, or one in seven residents, lived in poverty in 2009, an increase of 4 million from the year before, the Census Bureau reported on Thursday.

The poverty rate climbed to 14.3 percent — the highest since 1994 — from 13.2 percent in 2008.

Here is the Census Bureau report.

From Catherine Rampell at the NY Times Economix: Is Walking Away from Your Mortgage ‘Acceptable’?

[T]he majority of Americans still believe [walking away] is unacceptable, according to a report from Pew Research Center.

On the other hand, more than a third (36 percent) say the practice is at least sometimes acceptable.

Here is the Pew Research report.