Advance Retail Sales, Through August-2026

It's been awhile since I last published retail sales, but I never stopped tracking...

As always, the orange dots indicate inflation adjusted and the blue dots are nominal retail sales. 

While the numbers might seem impressive, the inflation adjusted sales for March, 2021 were $589.455B, compared to August 2026 of $597.656B. So the actual quantity of goods has not changed much in over 5 years. It did bottom in April, 2024 at an inflation adjusted $567,273. The latter being a rate of about +2.1% annual growth. Not so bad. 

For more in depth... the Retail Sales Report.

The latest petroleum inventories (Sep-16-2026)

Inventories moved up for gasoline and distillates, with crude and jet fuel easing, as the total of all products increased +2.2MB. The SPR decreased about 400KB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 130.2 Million barrels have been pulled and the drawdown has slowed significantly, with less than 60K barrels a day for last report. 

Gasoline consumption contines to decline on both y/y and m/m.

Gasoline prices continue to edge up, but diesel is the big story. Nationally, diesel prices will leap past $7 and California diesel with likely surpass $9.

The current national average of diesel, is at an all time high of $5.816 and when adjusting for inflation, is nearing the inflation adjusted figure of $6.554. It will surpass that shortly and will make a run for the July 2008 $4.767 inflation adjusted figure of $7.237.

While a lot of the issue is surrounding the Strait of Hormuz, the Ukraine shelling of Russia's refineries, and Russia limiting exports of refined products... also plays a role. 

At some point, natural gas will be an issue in Europe, but not my focus. U.S. stocks of NG are in decent shape and pricing not too out of the ordinary. For those interested in Europe, here is their website.

An Quick look at August 2026 Inflation data and COLA outlook.

With today's BLS inflation report, the numbers look like this...

The PPI report, from yesterday, lends to the belief the inflation rate is rising. 

The COLA projection currently looks like this...

It sits at the 3.5% increase level, but might make it to 3.6%, as energy will likely jump more than some of the tepid forecasts. I will go out on a limb and say 3.5% as my official outlook with an outside chance of 3.6%. My own rate of inflation is 2.7%, primarily due to my very limited driving. 

Of course there are some that think the R-CPI-E should be used, but note the 3.3% y/y rise in that index. It would likely land at 3.4% y/y. 

The underlying argument for the R-CPI-E is the current 366.138 basket, compared to the CPI-W's 328.481, OR the headline CPI-U number of  334.980. All of which list the same timeframe for 100. My problem with the R-CPI-E has been it lagging the past few years. My old article on this.

Sorry, there is no magical formula, nor are the heroes of the Marvel Universe going to spring to life and rescue all of us. 

The latest petroleum inventories (Sep-10-2026)

Inventories moved up across the board, as the total of all products increased 5+MB. The SPR decreased about 1.2MB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 129.8 Million barrels have been pulled and the drawdown has slowed significantly. 

Gasoline consumption contines to decline on both y/y and m/m.

Gasoline prices are edging up, but the story is still about diesel, imo. Diesel is set to blow past the near $6 mark towards the $7 mark nationally, and hold your breath California... from current near $8, to near $9 per gallon. Much of this was explained in my previous post. 

Stay tuned.

The latest petroleum inventories (Sep-02-2026)

A mixed bag, with crude falling, as well as gasoline, jet fuel and SPR. Distillate edged up, as well as Jet fuel. 

Gasoline consumption is edging downward on a 4 week moving average. -2.8% compared to year ago levels, and -0.5% on the week to week 4 week average.

Pump prices for gasoline are staying in a somewhat narrow band. However diesel prices could very well break through all time highs, set in June of 2022. $6+ for a national average is certainly within the realm of possibility, with California diesel possibly topping $8 in the near future. 

So some fun facts. The U.S. consumer uses about 1/3 of global gasoline consumption, while the U.S. refiners produce about 1/6 of global diesel product, after export the U.S. consumes... about 12% of global diesel products. 

U.S. refiners are operating at near record levels, to meet the demand. The global demand of diesel... is driving the price upward, at an astonishing pace. Despite refining about half as much diesel, as gasoline, the refiners are making 70% more on that diesel. 

One would think the refiners might wish to make even more, by tweaking the process to produce more diesel. While that is theoretically possible, it would also cause gasoline stocks to slip, thereby driving up gasoline pump prices, which is more politically visible. 

So while there is a bit of stability in gasoline prices, the diesel market will be allowed to escalate prices until, it becomes politically visible. However the majority of the public will focus on the pump price directly in their face and a minority will possibly virtue signal their indigation of diesel prices.

What I am saying is... diesel prices are set to rise another 82¢ a gallon from today's price, while gasoline will likely stay in their current range.

Feel free to bookmark and come back in a few weeks, to see how accurate I am, or point out my inaccuracies. 

Just when will the debt overwhelm the system?

Current national debt...

A brief history (simplified)...

We went off the so called gold standard in the 60s and early 70s. We began trading in dollar assets. We imported a bit more than we exported in the 70s, largely due to oil imports. The dollar fell in value, which prompted the circulation of more dollars and thereby inflation. 

That led to the so called eurobonds (not to be confused with Euro Bonds). In this case the eurobonds were principally in deutschmarks, meaning the debt was to be repaid in deutschmarks, regardless of the trading value with the dollar... which was weakening against these eurobonds.

Famously, Paul Volcker dramatically raised interest rates, which propelled bond yields upward, with the resultant demand in dollar based debt instruments.

The era of the strong dollar, increased purchasing power for imported goods, which escalated. Normally, the profits from these imported goods, would have been repatriated to the exporting country currency, keeping the dollar vs foreign currency rather stable. 

However creative ways and methods, including opening up U.S. companies, property, etc. to foreign entities. Of course, the early and easiest route was strong demand for U.S. debt. This continued until the early 2000s, when more and more U.S. property became the target and the attraction to Treasury debt became relatively stable. The dollar remained strong, as competing countries currencies weakened. 

It became a necessity for everyone, to keep the dollar strong, as any weakening threatened the value of dollarized assets. 

The graph above, indicates the timing of the various "QE" programs. The FED was basically absorbing the debt at the primary dealer market to keep interest rates low and inflation at bay. 

When the "trust" hits zero, a hole of $300B~$400B will need to be somehow covered. Congress would need to authorize that additional expenditure.

Where will it come from?

1. Additional debt creation, requiring ever increasing interest rates. Who will purchase that debt and at what premium, that will likely be spiraling upward?
2. Could the FED enact a never before seen size of QE, in attempts to keep interest rates at bay?
3. Will congress finally be forced to massively cutting spending?

As for #1: There is no willpower in Congress, now, in the near future, or even when staring at the abyss... to reduce spending and limit further debt creation. We'll be have gone over the fiscal cliff, before such cuts are forced, via eurobonds, extreme interest rates and massive weakening of the dollar, of which would happen rapidly and dollar holdings will get dumped, as everyone is heading for the exits. 

As for #2: The FED in theory could enact a massive QE program, but it would require fiscal restraint by Congress. Remember that an unrestrained fiscal spending outlook, couple with a massive QE would eventually lead to undermining the entire financial system, which leads to same result as outlined in #1.

As for #3: Probably, once it is too late and public is clamoring for massive change. 

All of that is extreme, but the "Trust" will be bust in 4th quarter of 2032, per the latest estimate. There is also a national election during that 4th quarter, as well. 

If it goes bust, which I have spent most of this article predicting... an immediate and huge impact will hit the economy. Seniors that rely soley on S.S. trust fund income, will be in need of many of the other government programs, which will simply move the debt into those areas. Those that do not soley rely on the trust fund, will likely cut back on spending. 

In the interim, goods and services will take a hit and industries will need to reduce spending (manpower) to bridge gap. Additionally, they may require loans to cover expenses, while the various product pipelines reduce inventories to a new reality. Just as the government is driving up interest rates on their bonds, notes, bills, etc. This is not just a U.S. debt problem, as the sum total of debt worldwide is increasing at a rapid rate.

If you think none of this can happen, just remember... we were here before, when everything was tiny, compared to today, and when there was a willingness to address the problems.

I would suspect that 2033 will be the year of reckoning, although significant cracks will be observed in the runup to that period.

Does the WNBA really have a problem?

Depends on what the WNBA is hoping to achieve. Certainly ticket sales increased for games Clark appeared in, yet the hysteria extends far beyond that phenomena... as of now. My guess is even bad press is good for ticket sales. Interest for whatever reason is at an all time high.

I suspect a lot of incidences are being blown out of proportion to keep the WNBA in the news and further promote interest... and thereby ticket sales and viewership.

Now whether that is the intended aim of the WNBA, remains to be seen, but I doubt they are really trying hard not to squelch the flow of money. 

So while some of the solutions to the WNBA's problems might seem straight forward, it would also rock the boat on the flow of money.

Whether the level of NBA play and WNBA play can be debated as being equal... the greed is certainly equal, imo

The quandry the WNBA has, is related to the flow of money and how to continue and capitalize on the current influx of attention. 

via GIPHY