Initial unemployment claims were disappointingon Thursday. It's not just that the weekly numbers moved up by 15,000 to 627,000. That is still within the recent range, and you could interpret the numbers as flattening and that would be good. The ongoing claims of 6.738 million are telling a slightly more dismal story. The fact that they are staying so high for so long can be read that people are running their insurance out and are dropping off the claims role (only to be replaced by newly unemployed), but, with unemployment still rising, they are not finding jobs. We get the Bureau of Labor Statistics job numbers for the month of June next week, and we should look for two things: First, the number will hopefully mirror the much-better-than-expected loss of 345,000 jobs in May. A loss that size would be staggering for any other time period, but it's a whole lot better than what we have seen this year. Guesses are for around the same number. We would also want to see the number of temp job losses continue to moderate as they did last month. The temp job loss last month was 7,000, down from 55,000. Improvement in the temporary job category usually precedes better overall numbers, so let's hope.
First-quarter GDP was revised a bitto an annual decline of -5.5% from -5.7%. There was a modest revision to inventories but no real news here. We are looking for a much better second quarter, but still negative. The Fed's statement on Wednesday offers no encouragement that an economic resurgence is at hand. The Fed feels the decline is moderating but growth has yet to ignite. Thus no change in their view that interest rates will be at exceptionally low levels for an extended period of time.
Jake Fuller, Soleil's lodging analyst, finds via his research much the same sluggishness in Europe. As I mentioned the other day, Jake has just finished his survey of hotel room rates in Europe and found no uptick from normal seasonal patterns. Rates were down 4% sequentially in May, -3% sequentially in June, and the advance reading for July is down 8%. While an 8% sequential decline looks like a bad headline, it is in keeping with the trends of the recent past and is not new bad news, but certainly does not show a resurgence in the Euro zone.