REAL GDP, ENERGY, INFLATION

You won't see it on the weather, but it appears a political hurricane is about to settle over the country and the eye of the storm will be D.C., where all will appear to be calm, bright and sunny. The spin outside the beltway will reach hurricane proportions.

There appears to be a shortage of black ink, but an amazing supply of rose tinted glasses and red ink.

The 3rd quarter is in the history books, but the data for that quarter is still rolling in, and with one week to go... the Real GDP is falling off a cliff. It started the quarter just north of 6.5% annualized and is now in the 0.5%~3.5% annualized range, with a week worth of data still to parse. Let's hope that optimistic 3.5% holds or even adjusts upward, although it is doubtful. 

I say doubtful as Real GDP is minus inflation and the inflation forecast for October is edging upward and now in the 5.7% to 5.8% range. If everyone gets their holiday shopping done early... then December will a real drag. 

As the forecasts stands now, the Real GDP is not really growing so much... we are simply paying a lot more, for a bit more goods. 

We can expect the Republican party to make hay out of next Thursday's GDP report and the Democrats to explain it away. Not real certain how the average American will react to a GDP report, as it may only reaffirm their waning consumer confidence. I would suspect the administration will continue to sell all these ills as signs of a growing economy, however slowly, and the believers will drink the Kool-Aid, at a higher cost... if there is any on the shelves. 

Not doubt the highly inflationary energy portion will be highlighted and the average American does pay attention to the cost of gasoline, as well as those heating bills, which have been played up as potentially staggering.

There may be disruptions to energy supply, stocks of crude oil (tight), gasoline (very tight), distillates (tight), propane (very tight) and natural gas (normal). 

• Excess is above 5 year range.
• Above normal is upper end of 5 year range.
• Normal is middle of 5 year range.
• Below normal is toward lower end of 5 year range.
• Tight is at the bottom of 5 year range.
• Very tight is below 5 year range.

Propane is the worrying component, as it is not only below the 5 year range, but days supply is at its lowest since October 11, 2013. Propane is not only used for heating, but is used considerable in the drying process during fall harvest. 

All of the above information is from EIA.GOV. Just as this chart data is derived from the same website...