I've always found the airline sector to be a pretty good indicator of what's going on in the real economy encompassing both business and leisure expenditures. What gets me started on this is new data showing thatUS hotel occupancy rates have fallen 4.7% y-o-y to 58.5% with an average daily rate fall of 8% to $99.92. Despite data like this equity markets seem to have shrugged off their concerns and have been posting some healthy gains, however in the real world the turnaround still seems to be some way off.
Air France KLM have said that they expect an operating loss this year. According to IATA February passenger traffic y-o-y was down 10.1% and cargo traffic down 22.1%. IATA says that the priority for airlines is to conserve cash and adjust capacity to match demand ahead of an expected $62 billion fall in industry revenues. The recent rise in oil prices ( Brent is up 3.3% to $54.36 a barrel ) is working its way through to jet fuel prices. If this continues fuel surcharges may make a surprisingly quick come back with a dampening effect on traffic later this year.
For the 3rd consecutive week US seasonally adjusted claims for first-time unemployment benefit rose 8,000 to 652,000 while the number collecting state benefits rose by 122,000 to 5.56 million. The underlying data is even worse with 6.4 million taking state unemployment benefits, 1.4 million on federal benefits, 8.6 million on part time work and a further 2 million unable to find work. Together 15% of the workforce is unemployed or underemployed. Don't look for a turn in consumer sentiment just yet.
No comments:
Post a Comment