Restaurant Performance Index Slows In July

The National Restaurant Association’s Restaurant Performance Index (RPI) is a monthly composite index that tracks the health of and the outlook for the U.S. restaurant industry.

The RPI stood at 101.0 in July, down from 101.3 in June. The above-100 reading indicates economic expansion in the restaurant sector, but at a slower pace. This is the 17th consecutive month the index has been in expansion.

The Current Situation Index stood at 100.7, down from 101.3, and was its 5th consecutive month in expansion. The Expectations Index stood at 101.2, down from 101.7, and was in expansion for the 21st consecutive month.

Restaurant Performance

Vehicle Miles Driven Increase 1.4% In June

Total miles traveled on all roads and streets were an estimated 261.7 billion miles in June, the U.S. Department of Transportation reports. This is a 1.4% increase from the 258.0 billion miles traveled in June of 2013.

Miles Driven Change

The rolling 12 month total of vehicle miles driven is 2.973 trillion miles. That is 2.2% below the high of 3.039 trillion miles in November of 2007.

Miles Driven Peak

Miles Driven Long

The map from the release shows that, year over year, travel increased in all five U.S. regions in June.

Miles Driven Map

Construction Spending Increases 1.8% In July

Total U.S. construction spending during July was estimated at a seasonally adjusted annual rate of $981.3 billion. That is 1.8% above the revised June estimate, and 8.2% above the July 2013 estimate.

Construction Spending

Construction Spending Annual Change

Private residential construction spending was at an annual rate of $358.1 billion, which is 0.7% above the prior month and 8.0% above the same month a year ago.

Private nonresidential construction was at an annual rate of $343.6 billion, which is 2.1% above the prior month and 14.1% above the same month a year ago.

Public construction spending was at a seasonally adjusted annual rate of $279.7 billion, which is 3.0% above the prior month and 2.1% above the same month a year ago.

Construction Spending Components

Construction Spending Components Annual Rate

China’s Real Estate Bubble


Here’s how it could play out, according to Silvercrest’s Chovanec.

“When property developers can’t get more credit, they have to slash prices to unload their unsold inventories (and pay back their debts), which gives investors second thoughts about whether to continue plowing their money into property,” he said.

“Sales dry up, prices fall, new [housing] starts dry up, construction dries up, sales of construction equipment, concrete, and steel dry up, land sales dry up, local government revenues disappear and they can’t pay their debts … in other words, falling asset prices undercut the basis for both past and future lending, and you’ve got a real system-wide problem,” Chovanec added.

China real-estate: A bubble bursting

Structural Economic Reform And Financial Markets


In late 2008, financial stress became widespread and perceptions of risk hit new highs. Concerns related to contagion among countries also had an increasing effect on premiums and increased the financing cost for many economies. The response to this problem was austerity – to stress the importance of getting the fiscal situation, and thereby the levels of debt of those countries with this problem, under control.

The returns to that effort, however, remain obscure. For example, some countries with increasingly large debt-to-GDP ratios benefit from historically low risk premiums, while several countries that applied radical measures to reduce their public debt still have to finance their debt at very high interest rates. France, for example, has a public-debt-to-GDP ratio that is expected to reach 91.8% in 2014. In July 2014, the country raised nearly €3.4 billion in ten-year bonds at the historically low rate of 1.77%.

Structural reform lowers country risk

When Temp Jobs Are The Only Jobs


“Temp jobs really don’t do much for you,” he said, complaining about the lack of benefits. “I get only 20 to 25 hours a week — they keep telling me things are going to pick up.” Mr. Fields, 45, had started with 40 hours a week, but now his part-time hours make it hard for him to support his wife, who has returned to school, and their 8-year-old son.

“Everywhere I look for jobs today, it’s all temporary,” Mr. Fields said. “The temporary agencies have picked up all the contracts.”

Steven Greenhouse - The Changing Face of Temporary Employment

Income Rises But Outlays Fall In July

Disposable personal income rose 0.1% in July to a seasonally adjusted annual rate of $13.06 trillion. This increase follows a 0.5% increase in June, and leaves disposable personal income up 4.5% from a year ago.

Disposable Income Change

Personal outlays for the month totaled $12.32 trillion, a 0.1% decrease, leaving personal outlays up 3.5% from the year prior.

Personal Outlays Change

Annual Change

Personal savings, which is disposable personal income less personal outlays, increased to $739.1 billion from $709.4 billion. The personal savings rate increased to 5.66% from 5.44%.

Savings and DPI