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1. Jobless Claims Hit Eight-Month High
The Labor Department reported 251,000 initial jobless claims for the week ending July 16, marking a 7,000-claim increase from the prior week and the highest mark since mid-November, CNBC reports.
Similarly, The Philadelphia Fed manufacturing index showed some cooling in new hiring, with the difference between companies hiring versus cutting back shrinking.
"In particular, the employment index was 19.4, also a 9-point decline," the news outlet reports. "Though that indicates continued expansion in hiring, it is the lowest reading since May 2021 and also is indicative that hiring is slowing. The average workweek reading was 6.4, falling for the fourth consecutive month and an indication that productivity could be declining."
2. Airlines Still Struggle To Meet Travel Demand
While the second quarter represented a return to profitability for airlines such as United and American, executives admitted during recent earnings calls that they're having a hard time keeping up with demand, the Wall Street Journal reports.
American Airlines CEO Robert Isom said operational challenges have limited the company's financial results.
“We’ve pulled out some additional flying, and that’s flying that we would rather do,” he said.
3. Hotel Execs Expect Resilient Investor Interest
While recession fears might be enough to drive away investors in more typical circumstances, hotel executives speaking at the 2022 ALIS Summer Update event in Dallas said that likely won't be the case this time around, with piles of private capital waiting to act on the sidelines.
Ashford Hospitality Trust President and CEO Rob Hays said hotel-focused real estate investment trusts could be a big target in the near future.
"I think you're going to see probably at least three of my peer hotel REITs go private in the next 24 months because there's too much money out there," he said. "And what private equity funds don't do is hand back money to their LPs."
4. New Hotel Construction Continues To Slide
The latest data from CoStar's hospitality analytics firm STR shows the seventh consecutive month of declining hotel construction in the U.S, although some marquee markets such as New York and Nashville are experiencing a supply boom.
Rooms in construction fell 20.1% year over year to 149,198, although there are early signs of a long-term supply increase with the rooms in final planning up 6.1% to 281,190.
New York leads major markets in terms of hotel construction, with 13,568 being built. That would be 10.8% of the city's existing room supply. Nashville was second at 3,939, or 7% of existing supply.
5. Economists Foresee Slowdown in Interest Rate Hikes
Economists surveyed by Bloomberg said they believe the 75-basis-point interest rate hike slated for next week will be the largest for the near-term future. They also expect a 50-basis-point increase in September followed by 25-basis-point increase until rates top out at 3.75% in early 2023.
“The still strong labor market and solid consumer spending provide the leeway for the Fed to continue to quickly raise the policy rate,” Oxford Economics' chief U.S. economist Kathy Bostjancic said.