After a disappointing start to the year in the first quarter, clear signs of improvement offer solid evidence that the economic expansion is back on track—job growth and consumer confidence have picked up, personal disposable income and consumer spending have also showed improvement. At the same time, inflation remains tame. Meanwhile, a strong value of the dollar against other currencies coupled with continued moderate global GDP growth continue to restrain U.S. export growth, including travel. LABOR The Labor Department announced the nation’s economy added 223,000 jobs in June, but flat wages and an exodus of workers from the labor market suggested an economy that is still far away from a full recovery.
The Conference Board reported that Consumer Confidence rose to 101.4 in June from a revised 94.6 in May. Consumers feel much better about the economy and labor markets in June, a positive trend for future spending, according to data.
Personal income and consumer spending remained strong midway through the second quarter, according to the Commerce Department’s June release.
The U.S. trade deficit increased to $41.0 billion in May 2015, according to the Department of Commerce. While the trade economy continued to recalibrate from the West Coast longshoreman negotiations, travel exports continued to increase over the first five months of the year—up 1.5 percent year to date.
STATE OF BUSINESS
Business still appeared to be slow in the first quarter of 2015, prompting the Commerce Department to revise estimates that corporate profits in the U.S. will decrease $110.8 billion in the first quarter (compared with a $30.4 billion decrease in the fourth of 2014). According to the June U.S. Travel Barometer, less than three quarters of U.S. resident searches were for future travel within the U.S., up slightly from the previous two months. STR reported that U.S. RevPAR growth softened in May. Still, occupancy ended the month at 67.5 percent, the highest ever reported for May, while demand broke an unprecedented 104 million room nights.
According to data recently released by the Bureau of Transportation Statistics first quarter airline financial, U.S. passenger airlines reported an after-tax net profit of $3.1 billion in the first quarter of 2015—the highest amount for a first quarter since bag fees started in 2008.
ROADS & RAILS
According to the Energy Information Administration’s (EIA) Short-Term Energy Outlook, U.S. regular gasoline monthly average retail prices reached $2.80 per gallon in June, an increase of $0.08 from May, but still $0.89 lower than in June 2014. The Global Business Travel Association’s (GBTA) foundation released their 2015 Q2 Business Travel Outlook and estimated that $74.1 billion was spent on business travel in the U.S. in the first quarter. The Office of Travel and Tourism Industries (OTTI) released international visitation forecasts through 2020 this month, updating their forecasts for visitations by country and by region from 2015-2020. Question: Do everyday work decisions line up with American ideals of putting family first? The answer can be found in Project: Time Off’s newest study, “The Work Martyr’s Affair: How America’s Lost Week Quietly Threatens Our Relationships.”
In our latest holiday travel economic impact report, U.S. Travel economists estimated the July 4 impact on the U.S. economy to be $15.8 billion, up 1.7 percent from 2014.
The U.S. Senate recently voted to approve Trade Promotion Authority (TPA) legislation. This was U.S. Travel’s top legislative priority of this congressional session, and our government relations team worked with a broad business coalition to get TPA enacted on behalf of the travel community.
Reprinted from ustravel.org.