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November 2019: ECONOMIC OVERVIEW

The state of the economy is mixed. While the record-long expansion has continued, the pace of economic growth has slowed. On a positive note, the labor market has remained strong, consumer confidence is elevated, wage growth has remained solid and consumer spending has continued to grow. On the other hand, business investment has stalled and exports have declined. As a result, the manufacturing sector, which is most exposed to the current weakness, is suffering. Meanwhile, the rest of the economy has continued to grow. The consensus outlook is that the expansion will continue but decelerate in the near term.

CURRENT STATE OF THE ECONOMY

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Consumer Confidence

Despite a second month of declines in October, consumer confidence levels remain high and unlikely to negatively impact holiday spending.

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State of Business

Business investment and output remained soft amid the continuing fallout from the U.S.-China trade war.

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Consumer Spending

Households continued a slower rate of spending in September, with personal consumption expenditures expanding by 0.2% from August.

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Travel Trends Index

Travel to and within the United States grew by 2.2% y/y in September, according to U.S. Travel Association’s latest Travel Trends Index (TTI), marking the industry’s 117th straight month of growth.

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Labor

According to the most recent jobs report, employment grew by 128,000 jobs in October, a solid performance considering that a strike at General Motors plants and a decline in the federal workforce.

TRAVEL INDUSTRY UPDATES

While the lodging industry is starting to see a slowdown in their metrics, travelers do not appear to be holding back on their upcoming holiday travel. Industry trends point to a decline in group booking in the latter half of 2020 and continued softening of international travel in the near term.

Domestic Travel

The latest U.S. Travel Barometer reported that 84% of U.S. residents searching for lodging in October searched domestically, slightly higher than the year prior.

International Travel

Overseas visitation to the U.S. increased by 1% through the first nine months of 2019. Just under 3.5 million overseas visitors traveled to the U.S. in September.

Lodging Industry

U.S. hotels recorded the second monthly revenue-per-available-room decline of 2019 in September.

Transportation

TSA expects Thanksgiving airport travel to increase by 4% to over 26.8 million holiday travelers in 2019.

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U.S. Travel Updates

U.S. Travel released its updated travel forecast last month, which includes revised numbers from 2018 and a look ahead through 2023. Overall international arrivals are expected to increase from 80 million in 2018 to 88 million by 2023.

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