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OCTOBER 2018: ECONOMIC OVERVIEW

The U.S. economy is strong, and the headwinds the U.S. is facing are textbook “problems of plenty” (i.e., normal problems facing a strong, mature economy). While financial markets are turbulent, and some headwinds have been exacerbated by our own economic policy decisions (see: trade war, real wages), the U.S. economy is poised to face these concerns. Here are some highlights on the current state of the economy:

CURRENT STATE OF THE ECONOMY

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Consumer Confidence

Consumer confidence hit an 18-year high in September, a positive indicator for spending going into the holiday shopping season, as robust job growth and a strong economic outlook bolstered Americans’ expectations for the future.

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State of Business

Civilian aircraft orders comprised the majority of business spending in August, according to the Census Bureau’s advance durable goods report. New orders for all durable goods in August increased by $11.1 billion or 4.5 percent month-on-month (m/m) from July.

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Consumer Spending

Consumer spending cooled slightly in August to the lowest monthly increase in six months. According to the Commerce Department, personal consumption expenditures (PCE) increased at 0.3 percent in August from July.

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Travel Trends Index

Travel to and within the U.S. grew 3.8 percent year-over-year in August, according to U.S. Travel Association’s latest Travel Trends Index (TTI)—marking the industry’s 104th straight month of overall expansion. U.S. Travel economists remain wary that the decelerated rate of international inbound travel will cause the U.S. to fall even further behind global competitors.

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Labor

The U.S. economy added 134,000 jobs in September and the unemployment rate fell to 3.7 percent, the lowest level since December 1969 according to the Bureau of Labor Statistics. Hurricane Florence may have impacted jobs results, with leisure and hospitality employment down slightly after trending upwards over the last several months.

TRAVEL INDUSTRY UPDATES

Strong consumer confidence and optimism about the economy will continue to bode well for domestic travel even though wage growth has basically stalled. The lodging industry reported its first slowdown in RevPAR growth in more than 102 months – largely as a result of the demand surge created in the wake of 2017 hurricanes.

Domestic Travel

The latest U.S. Travel Barometer reported that of U.S. residents searching for lodging in September, 83 percent searched for lodging within the United States - slightly higher than the 80 percent indicating domestic travel intent last September.

International Travel

Nearly 25 million international visitors traveled to the U.S. in the first four months of 2018, according to recently released visitation data from the Commerce Department’s National Travel & Tourism Office.

Lodging Industry

Preliminary lodging data from STR suggests September will end the streak for U.S. hotel industry’s long run of revenue per available room (RevPAR) growth at 102 months. The early numbers indicate U.S. hotel RevPAR will be flat to down 2 percent overall.

Transportation

September 2018 average gas prices remained virtually unchanged from August according to the Energy Department. The average price of retail gasoline across all formulations and grades in the U.S. reached $2.92 in September.

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Member Webinar Series

This month's Debrief webinar—The State of International Travel—will be held on Tuesday, October 30 from 2:00-2:45 p.m. ET. U.S. Travel will provide an overview of the recently-released National Travel and Tourism Office international inbound travel visitation numbers.

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U.S. Travel Updates

Based on recently released National Travel and Tourism Office (NTTO) visitation data, the U.S. welcomed nearly 77 million international visitors into the country in 2017, a 0.7 percent increase from 2016. We have included these NTTO revisions in our numerous factsheets and data products.

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