MetroIntelligence Economic Update by P. DUFFY
2Q20 GDP fell by 32.9 percent in advance estimate
Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020 according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.
Initial unemployment claims rise slightly to 1.43 million, continuing claims rebound to 17 million
In the week ending July 25, initial unemployment claims were 1,434,000, an increase of 12,000 from the previous week’s revised level. The number of continuing claims during the week ending July 18 was 17,018,000, an increase of 867,000 from the previous week’s revised level.
Federal Reserve to keep rates low and continue buying gov’t and mortgage bonds
The Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent, and expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations.
25 percent of ‘mom and pop’ landlords have borrowed funds to cover operating costs
The large majority (67%) of landlords who own or manage fewer than 20 units expect to derive at least one-fourth of their retirement income from their rental properties. The majority of respondents reported that rent collections are down compared to the prior quarter, and 1 in 4 have already borrowed funds to cover operating costs. Only 3 out of 5 respondents expressed some level of confidence in being able to cover their costs over the next three months, and 4 out of 5 said they would be interested in a government loan program to help landlords.
Hotels performing sightly better in weekly report, but still sharply down year-on-year
U.S. hotel performance data for the week ending 25 July showed slightly higher occupancy and room rates from the previous week. However, year-on-year, average occupancy fell 37.9 percent to 48.1 percent, the Average Daily Rate fell 27.3 percent to $99.24, and Revenue per available room (RevPAR) fell 54.8 percent to $47.75.