peripatetic
per-uh-puh-TET-ik
1. Moving or
traveling from place to place.
2. Of or related
to walking, moving, or traveling.
From Latin
peripateticus, from Greek peripatetikos, from peripatein (to walk about, to
discourse while pacing as did Aristotle), from peri- (around) + patein (to
walk).
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TIP OF THE WEEK
TIP OF THE WEEK
It sounds like we
will be peripatetic. This summer, Americans will spend a total of $101.1
billion on vacations this year, representing a 12.5% increase from 2016,
according to projections from the Vacation Confidence Index released Wednesday
by insurance company Allianz Global Assistance. This is the first time in the
index’s eight-year history that spending has exceeded $100
billion.
That will be
welcomed by the hospitality industry. The U.S.
hotel industry reported mixed year-over-year results. In comparison with the
week of 19-25 June 2016, the industry recorded that during the week of 18-24
June, occupancy fell 1.2% to 75.8%, ADR rose 1.1% to $129.73 and RevPAR was
mostly flat (-0.1% to $98.31).
Maybe people are
eating out instead of staying out. Driven by improvements in the current
situation indicators, the National Restaurant Association’s Restaurant
Performance Index (RPI) registered a moderate increase in May. The National
Restaurant Association’s Restaurant Performance Index is a statistical barometer
that measures the overall health of the U.S. Restaurant Industry. This monthly
composite index is based on the responses to the National Restaurant
Association’s monthly Restaurant Industry Tracking Survey, which is fielded
among restaurant operators nationwide on a variety of indicators including
sales, traffic, labor and capital expenditures. Although restaurant operators
continued to report mixed same-store sales and customer traffic, the results
were an improvement over April’s levels.
If you segregate
the number of SBA loans by NAICS codes, restaurants are the leading
beneficiaries of SBA guaranteed financial
assistance.
Please let me know
if you would like a copy of the most recent report from the National Restaurant
Association on their Restaurant Performance Index.
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Indices:
PRIME
RATE= 4.25%
SBA
LIBOR Base Rate July 2017 =4.23%
SBA
Fixed Base Rate June 2017 = 6.39%
________________________________________
SBA
504 Loan Debenture Rate for June
The
debenture rate is only 2.81% but note rate is 2.858% and the effective yield is
4.596%.
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AHEAD OF THE YIELD CURVE
AHEAD OF THE YIELD CURVE
If you're reading
this on a treadmill or while taking a walk, you may know about the peripatetic,
or walking, philosopher Aristotle, who talked and taught while strolling
around.
Perhaps the
Federal Reserve should adopt a peripatetic approach at their meetings.
A divided Federal
Reserve policy committee couldn’t reach an agreement in June on the timing of
when to begin shrinking its massive balance sheet. Inflation has remained
almost continuously below the central bank’s 2 percent target for more than five
years. On the other side of the Fed’s dual mandate, the jobless rate is at a
16-year low and beneath most Fed officials’ estimate of the maximum use of labor
resources.
Minutes from the
central bank’s June confab underscored growing doubts about the efficacy of the
Phillips curve, an economic concept named for the late economist A.W. Phillips,
which states that as unemployment falls inflation will ultimately rise as
workers see wage increases. Fed officials have justified its recent tightening
stance on the Phillips curve. But inflation is falling below the Fed’s 2%
target range despite unemployment falling.
The jobs picture
continues to improve.
Here is a summary
of net payroll employment and this week’s interesting little table of
data:
June 222,000
May
152,000
April
207,000
March
50,000
February
235,000
January
216,000
2016
2,160,000
2015
2,740,000
2014
3,116,000
2013
2,074,000
2012
2,193,000
2011
2,103,000
2010
1,022,000
2009
-5,052,000
2008
-3,617,000
2007
1,115,000
2006
2,071,000
2005
2,484,000
2004
2,019,000
What does all this
mean?
I don’t
know.
The
better-than-expected jobs report offers support to the Federal Reserve’s plan to
raise interest rates and begin shrinking its bloated balance sheet as early as
September. Bond investors are paying attention to the timing of reductions to
the Fed’s bond holdings, as the prospect of a large buyer of Treasuries leaving
the market could lift yields for U.S. government paper, further tightening
policy.
Not too much
should be read into one month’s report. June has been the strongest month for
job growth over the three previous years, followed by July and November. This
is the 4th consecutive solid job gain in June: 304 thousand in June 2014, 206
in June 2015, 297 thousand in June 2016, and now 222 thousand in June 2017.
Instead keep your
eyes and ears open for this Thursday’s sale of 30 year Treasury bonds. At last
month’s sale, the 2.870 percent high yield was 18 basis points below the awarded
yield at April’s auction and 30 basis points below the March peak at 3.170
percent, which was the highest yield since September 2014. The flattening of the
U.S. Treasury yield curve continues, with long term yields trending lower
despite short term yields steadily rising along with hikes in the Fed Funds
rate.
The day after last
month’s bond sale, the Federal Reserve raised its benchmark short-term rate by a
quarter percentage point. On the heels of the Fed’s move was the release of
capacity utilization data. Capacity utilization for the industrial sector
edged down 0.1 percentage point in May to 76.6 percent. This is 3.8% below the average from 1972 to 2016 and below the
pre-recession level of 80.8% in December 2007. Several analysts have pointed to
a rate between 81% and 82% as a tipping point over which inflation is spurred.
The next release on capacity utilization comes out on Friday. The Federal
Reserve then meets again two weeks later.
The
yield on the 30-year bond saw a weekly jump of more than 10 basis points,
marking its largest single-day gain in more than two months on Thursday after
the Federal Reserve minutes were released. On Friday the 30-year Treasury
bond’s yield rose 2.2 basis points to 2.925%.
The long end of
the yield curve as reflected in 30 year Treasury bond appear to be enervating
any splenetic presentiment of a bigly recrudescence in interest rates by being
quiescent.
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OFF BASE
OFF BASE
I
don’t know if our former President was peripatetic but his name sure sounded
like it. Obambulate (o-BAM-byuh-layt) means to walk about. It is from Latin
ob- (to) + ambulare (to walk).
I
won’t take the bait and mention the word trumpery. It means something showy but
worthless; nonsense or rubbish; or deceit; fraud; trickery. It is from the
French tromper (to deceive).
That
was a paralipsis (par-uh-LIP-sis) which means to draw attention to something
while claiming to be passing over it. That is from the Latin paralipsis, from
Greek paraleipsis (an omission), from paraleipein (to leave on one side), from
para- (side) + leipein (to leave).