Holiday crush: AAA forecasts a record holiday travel season

The crowds will shift from malls to roads and airports, as AAA expects a record number of Americans to travel this holiday season.

More than 103 million people are expected to travel from Dec. 23 through Jan. 2, up 1.5 percent, or 1.5 million people, from last year. It’s the eighth straight annual increase in holiday travel, according to AAA.

“Rising incomes and continued low gas prices should make for a joyous holiday travel season,” AAA CEO Marshall Doney said in a statement. Overall, improvements in the economy are driving travel.

Consumer spending is expected to rise 4.1 percent this year vs. 2015, according to AAA’s holiday travel forecast report. The nation’s unemployment rate was 4.6 percent in November. Personal income will rise 3.3 percent as an improved job market drives up wages. The stock market is at a record high.

How people travel aaa-pie

Most holiday travelers (an estimated 93.6 million people) are hitting the road again, with road trips expected to rise 1.5 percent from last year.

That’s largely due to low gas prices, even though today’s average national price of $2.24 a gallon is higher than the of $2 a year ago. AAA estimates that U.S. drivers have saved over $27 billion at the gas pumps so far this year compared with last year.

In addition, average car rental rates are slightly lower than last year at $66 a day, according to the forecast.

Air travel will increase by 2.5 percent, with more than 6 million Americans flying. Other types of travel, such as by trains, buses and boat, will decline slightly.

AAA projects holiday airfares will average $204 for a round-trip flight on the top 40 U.S. routes. Lodging rates are to increase 7 percent, with travelers spending an average of $144 a night.

Where people go

While many people visit relatives for the holidays, others take time off for a winter vacation. Warm-weather destinations top the list, with the exception of New York, based on AAA.com bookings. Here are the top five destinations:

  1. Las Vegas
  2. Orlando, Fla.
  3. New York City
  4. San Diego
  5. Anaheim, Calif.

AAA’s travel projections are based on economic forecasting and research by IHS Markit.

Got job? Millennials remain optimistic, new study finds

Even though millennials see higher unemployment rates, many remain optimistic about their job prospects, according to a new Federal Reserve Board report.

fed-report-chart

Factors, such as automation and the trend of contingent workers, have affected employees, especially millennials who are the newest entrants to the workforce.

The Fed used unemployment rates from August, when the U.S. rate was 4.9 percent. (See chart at right.) The rates were lower in November, but the trends are similar: The jobless rate was 14.4 percent for people 18-19, 4.8 percent for those 25-34 and 4.6 percent for the nation, according to data the U.S Bureau of Labor Statistics.

The Fed commissioned GfK to survey over 2,000 people in 2015 to compare to a similar poll in 2013. The 120-page report provides a snapshot of the employment, education and financial independence of people age 18 to 30.

Overall, those adults were more optimistic about future job opportunities in 2015 (61 percent) than in 2013 (45 percent). Moreover, people who were employed, enrolled in college or who had some college education were the most optimistic.

And, as other surveys have shown, millennials aren’t so different from earlier generations in wanting employment stability. They prefer permanent, steady jobs (62 percent) to higher-paying  jobs (36 percent) and to contingent or contact work.

Other key findings from the 2015 survey include:

  • 61 percent are positive about future employment opportunities vs. 45 percent in 2013. People with permanent (68 percent) or full-time (65 percent) jobs were more optimistic about their future than those with temporary (43 percent) or part-time (54 percent) jobs.
  • More millennials see value in higher education than in 2013. Half said the financial benefits of education outweigh the costs, up from 41 percent in 2013. Despite that knowledge, people without postsecondary training list cost, a lack of time and course scheduling as obstacles.
  • Over 30 percent didn’t not receive information about jobs/careers in high school or college.fed-living-expenses
  • 45 percent work in a field closely related to their educational and training background.
  • Nearly half of part-time workers were considered underemployed, and would prefer to work more hours.
  • 73 percent can cover monthly expenses with their income vs. 64 percent in 2013, but many receive financial support from their families. And more of them can cover long-term expenses in an emergency (See chart at right.).

The bottom line: Most millenials aren’t sure how their standard of living will stack up against their parents’, according to the survey. Those whose parents have a high school education or less are more likely to expect a higher standard of living (19 percent) than those with at least one parent with a bachelor’s degree (17 percent).

Let’s get real about interest rates

Yes, the Federal Reserve on Wednesday raised the key federal funds rate (by 0.25 percent).

Yes, it’s the second rate hike since last December.

However, the federal funds rate still is below 1 percent after hovering near zero since late 2008. And while higher rates will affect consumer loans such as student loans, car loans and home mortgages, the Fed repeatedly has said that future increases will be “gradual.”

The Fed “sees the potential for a modest uptick in prices and activity over the next 12-24 months,” Lindsey Piegza, chief economist at Stifel Fixed Income, said in a statement. “But in the long-run, the Fed’s forecast for a moderate (read: blah) trajectory of the economy remains.”

Much of what I wrote in this article for The Dallas Morning News a year ago on how higher rates might affect consumers still holds true today.

Interest rates generally are still low.

Look at the 30-year mortgage rate. It peaked at 18.5 percent in October 1981. Today, it’s 4.16 percent vs. just under 4 percent a year ago.

States see steady employment

New government data shows what the Federal Reserve leaders recognized earlier this week: steady employment trends in most states through November.

In a long-expected move, the Fed’s policy setting committee on Wednesday raised interest rates by 0.25 percent to 0.75 percent. Among its reasons were a labor market that has continued to strengthen and economic activity that’s expanded at a moderate pace since the middle of the year.

California leads national employment gains with 377,200 new jobs for the 12 months through November, according to data released today from the U.S. Bureau of Labor Statistics. Overall, 31 states plus Washington, D.C., added jobs over the last year, Wyoming lost jobs and employment was about the same in 18 states.

You can see state-by-state data in an interactive graphic I made with Tableau Public. Just scroll over each circle to see the employment data.

For the month of November, employment was virtually unchanged n 39 states, nine states added jobs and two states lost jobs. Florida added most jobs (+29,600) and Virginia lost the most jobs (-13,600). California added 13,600 jobs last month.

The nation added 178,000 jobs in November, with most gains in professional and business services and health care, and 225,300 over the last 12 months.

Q&A: What the Alaska Airlines and Virgin America deal means for travelers

Alaska Airlines on Wednesday completed its purchase of Virgin America, kicking off a merger process it hopes to complete within three weeks.

The Seattle-based parent of Alaska Airlines paid $2.5 billion for Burlingame, Calif.-based Virgin America, a week after getting approval from the U.S. Department of Justice contingent on Alaska Air Group Inc. reducing the scope of its code-share agreement with American Airlines, the world’s largest airline based in Texas. Alaska expects to receive approval from regulators and Virgin America shareholders by Jan. 1.

The merger Alaska and Virgin America will create the nation’s fifth largest airline, with nearly 1,200 daily flights to 118 destinations in North America, Costa Rica and Cuba. Based in Seattle, the combined airline will be a West Coast powerhouse, with hubs in Seattle; Portland, Ore., Anchorage; San Francisco and Los Angeles.

Here are some answers to questions travelers may have:

Q. Where can Virgin America tickets be bought online?

A. Starting Dec. 19, customers can buy Virgin America tickets at AlaskaAir.com. They also can continue to buy tickets at VirginAmerica.com for the immediate future.

Q. Are there any new routes?

A. The combined airline will offer new daily flights to Minneapolis; Orange County, Calif.; and Orlando, Fla.; from its San Francisco hub starting in summer 2017. The schedule will be announced on Dec. 21, the same day tickets to those places go on sale.

Q. Will the Virgin America name and/or experience go away?

A. Travelers should not see “major changes” to the Virgin America product or flying experience in the next 12 months. Alaska said it’s “conducting extensive customer research to understand what customers value most” and hopes to have a decision about the Virgin America brand in early 2017.

Q. If you have an existing flight reservation, what should you do?

A. If you have an existing reservation, your reservation remains the same, and each airline’s current travel policies still apply. If you have a flight on Virgin America, check in at a Virgin America counter. If you have a flight on Alaska, check in at an Alaska counter.

Q. What changes will loyalty program members of each airline see?

A. Alaska Mileage Plan and Virgin America Elevate will continue to operate as separate programs. Starting Dec. 19, Virgin America Elevate members and Alaska Airlines Mileage Plan members can earn rewards on each other’s flights and elite members will receive priority check-in and boarding on each other’s flights. Starting Jan. 9, members of both frequent flier programs will be able to redeem award travel on both airlines and Elevate members will be invited to open new Alaska Mileage Plan accounts.

aa-va-merger-chart
Courtesy of Alaska Airlines Group Inc.

Q. What does the merger mean for California customers?

A. The combined airline offers 289 daily flights to 52 places in California. Just from the San Francisco Bay Area, there are 113 daily flights to 32 destinations.

Q. Will Alaska’s fleet change?

A. Alaska said it has not made any long-term decisions about its fleet. For now, Virgin America’s Airbus A319 and A320 jets will join Alaska’s all-Boeing fleet.

It remains to be seen how the Alaska and Virgin America merger and their different styles will shake out. Virgin America is known as young, fun airline with cabin mood lighting and touch-screen personal entertainment. Alaska has invested in technology, such as luggage tags customers can print at home, for more efficient operations.

“Alaska Airlines and Virgin America are different airlines, but we believe different works – and we’re confident fliers will agree,” Alaska Air Group CEO Brad Tilden said in a statement. “The two airlines may look different, but our core customer and employee focus is very much the same.”

Travelers can find more answers on an Alaska web page designed for that purpose.

NOAA report: Long-term Arctic warming trends continue

Unprecedented warmer air temperature over the Arctic triggered extensive melting in the sea ice and land-based snow cover this fall, according to a new report from the National Oceanic and Atmospheric Administration.

The 11th annual Arctic Report Card, which is based on research by 61 scientists in 11 countries, shows the continuation of long-term Arctic warming trends.

I recently wrote in another blog post about two New Zealand glaciers — Franz Josef and Fox glaciers — that have been melting at an accelerated rate in recent years. Franz Josef Glacier has retreated by nearly a half mile since 2008.

“Rarely have we seen the Arctic show a clearer, stronger or more pronounced signal of persistent warming and its cascading effects on the environment than this year,” Jeremy Mathis, director of NOAA’s Arctic Research Program, said in a statement. Here are some of the key findings of the report:

Surface air temperature: Average annual air temperature over land was the highest on record, up 6.3 degrees Fahrenheit since 1900. Arctic air temperatures are rising twice as fast as global temperatures. For October-November, the highest average temperature was 25 degrees Fahrenheit above the long-term norm in Northern Canada.

Continue reading NOAA report: Long-term Arctic warming trends continue

Who is that cardboard man at New Zealand’s two biggest glaciers? Ask mom.

My new hat made by Nolly Martini. (Martin Melendy)

At New Zealand’s Franz Josef Glacier, a park ranger provides an update on daily conditions and safety tips.

The life-size image is a cardboard cut-out, but the ranger is real. His mother told me so.

I met Nolly Martini when I visited her Willows Crafts shop in Harihari, a tiny hamlet about 40 miles north of Franz Josef on New Zealand’s South Island.

I was attracted to the hand-knitted hats and scarves, and she told me that she makes many of them from wool and Samoyed dog hair. She also sells crafts made by other local residents.

As I paid for a colorful hat made by Martini, she told me that her son posed for the cardboard cut-out when he worked for the New Zealand Department of Conservation. The proud mother pulled out photographs of Mark Martini standing next to his cardboard double. (The DOC confirmed it.)

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A visitor walks through a lush rainforest on the Te Ara a Waiau trail. (Sheryl Jean)

Sure enough, Mark Martini’s image greets me when I arrive at Franz Josef Glacier later that day. (See photo at top.) The DOC told me that his image also graces the nearby Fox Glacier.

Tourism is one of New Zealand’s main economic engines. The Franz Josef and Fox Glaciers are among the country’s biggest tourist attractions, with about 1 million visitors a year.

Continue reading Who is that cardboard man at New Zealand’s two biggest glaciers? Ask mom.

Will the latest Beige Book put pressure on the Fed to act next month?

The U.S. economy continued to grow — albeit at a moderate or modest pace — across most regions of the country from early October through mid-November, according to data released Wednesday by the Federal Reserve.

The latest Beige Book report combined with other strong economic data could pressure Fed leaders to raise interest rates, which have been near zero since 2008, when they meet in two weeks. Some Fed leaders are growing increasingly impatient: Two bankers dissented at the last Federal Open Market Committee meeting on Nov. 1-2 because they wanted to raise the federal funds rate by 0.25 percent.

The Beige Book is based on economic, employment, wage and price reports from 12 Federal Reserve banks nationwide. The San Francisco district, which covers seven western states plus Alaska and Hawaii, reported moderate economic growth. Inflation remained at bay, with slight upward price pressure in most areas.

Here’s some key economic data for the nation and the San Francisco district:

Real estate and construction: U.S. residential real estate activity improved across most districts, including San Francisco, with more single-family construction and higher home prices. The real estate market was particularly strong in the Intermountain West. Commercial construction increased in seven districts, including San Francisco, but shortages of labor and materials dampened growth in some parts of the western district.

Continue reading Will the latest Beige Book put pressure on the Fed to act next month?

Finish this sentence: The U.S. gig economy is growing faster than …

That might be a difficult task due to conflicting data.

Two government agencies plan new research to more accurately count the companies and workers in the so-called gig economy, which also has been labeled the on-demand economy, and better understand trends of that realm.

The “share of U.S. jobs without a formal employer-employee relationship is large and growing,” but some data shows the opposite, Jim Spletzer, an economist for the U.S. Census Bureau’s Center for Economic Studies, wrote in a recent government blog post. Jobs in the so-called gig economy include freelance and contract workers.

Continue reading Finish this sentence: The U.S. gig economy is growing faster than …

How to stay healthy while traveling

When I arrived home last week after an extended trip, my snuggest pair of jeans still fit.

While I don’t suggest losing weight as a holiday goal, I advocate staying healthy and active while traveling.

One of the great joys of travel is trying new things, whether it be food, drink or experiences. And people are apt to splurge while on holiday. So, go ahead and enjoy that German Schnitzel or trifle, just balance it with some vegetables in between.

The winter holidays bring special challenges because most of us eat more — and perhaps richer — food than we usually do. It’s important to stay active while spending quality time with family and friends. Take group walks before eating dinner and after dessert. Plan group outings, such as hiking, ice skating or sledding.

The fruit option for breakfast on a recent Qantas Airways flight from Sydney, Australia, to San Francisco. (Sheryl Jean)

Here are some of my tips to help you stay healthy while traveling any time of the year:

Stay hydrated: Drink as much liquid — preferably water — as possible to stay hydrated o a plane and on the ground. It’s good for your skin and aids in digestion. Avoid caffeine.

Make smart in-flight food choices: Bring or buy healthier food, such as fruit, salad or hummus, on U.S. flights. On international flights, choose fruit instead of the egg-sausage breakfast and skip dessert. Avoid salt and salty snacks, which will help your body retain water.

Continue reading How to stay healthy while traveling