Insanity is Bi-partisan!

Not that long ago, the 25th Amendment became a big story among democrats (Nancy Pelosi), as they sought a way to remove Trump from office. After January 6th, republicans joined in. Apparently, Pence was considered a better option.

However, it never took root and likely would not have been implemented. A simple read of the relevant section, would seem to indicate why it would have been unlikely. Majority of cabinet... twice, 2/3 of house and senate. It would have been easier to impeach, imho.

Fast forward to 2023, and once again someone is suggesting the 25th Amendment. This time initiated by disgruntled republicans, in regards to Biden. Those same republicans that despise Kamala Harris.

This is what baffles me... They want to replace Biden, on the pretext he is not of sound mind, with someone they regard as being flaky. I would have to suggest those making such arguments, are also not of sound mind, flaky, etc.

Realistically, the proponents of the 2021 and the 2023 25th Amendment usage are not crazy, but really do believe their constituency is dumber than a box of rocks, and this makes for further divisions among groups that relish the hyper partisan rhetoric. It's much easier to keep the public unaware of the fleecing going on, by both parties.

Sadly, I am beginning to believe they are correct about their constituencies.

Being a part of those constituencies... what the hell does that make me? 

I already know, so spare me the comments.

PCE Revisions and End of Month Inflation Results (All Reports)

So here it is...

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This also, includes the latest revisions in the PCE release. I include the previous month's report to indicate the revisions.

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You will notice some sharp upward revisions, compared to last month. That +0.6% M/M increase was after the major adjustment in December's numbers. Without that December adjustment, that +0.6% would have been much higher. 

Don't worry too much, as these numbers get adjusted on a regular basis. It does serve to point out that inflation is not falling off a cliff.

The good news would be the "trimmed mean PCE". It actually slid -0.1%, after holding at 4.7% for the preceding 5 months. 

The BEA Report. The Dallas FED Report. For a breakout of "trimmed"... 

• Components included and excluded from this month's Trimmed Mean

It is an Excel download. Of the 54 items not trimmed, I utilize 7 (13%.) Of the 121 trimmed out, I utilize 42 (34.7%.)

Oh well, my own CPI is 5.5%. Using the trimmed mean, it is 4.9% v the FED's 4.6%. 

I would write about the GDP, but it gets revised on a regular basis. Next month will be revised and the annual revision in July will take place for all. Sometimes, as much as 3.0% change from the original advance release.

Gasoline consumption through week of Feb-17-2023

Gasoline prices were (per AAA) were down 2.9¢ this week, to $3.393. A year ago, the price was $3.535. 

The streak for lower prices is now in its seventh day. Hate to jinx this, but it is possible, the average price could make it to $3.25 over the next couple of weeks.

The seasonal consumption is edging up. (This is a four week moving average). It is +2.2% above one year ago levels. However, the national average is -4.0% below same period.

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st 2022, stands at +92.1M barrels. If you saw last week's report, that is up another 2.0M barrels. This is a global market, so the global economy, as well as refinery output, is key to where pump prices will be.

Where will pump prices be next week? My inclination would be a continuation of ever so slight decreases. 

Crude Inventories continue to build- Feb 23 2023

Today's EIA.gov report. 

Crude stocks up again, +7.6M barrels, from last week; Distillates up +2.7M Barrels; and Gasoline slid -1.9M barrels. 

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WTI at $75.76, compared to $78.83, one week ago, and $90.39 a year ago. 

Refinery output slightly decreased on this report, and still slightly below one year ago levels. 

For anyone interested, the U.S. has exported 475M barrels of crude and petroleum products, more than imported, since March 1, 2022. 5.4M barrels this past week.

Overall, crude stocks are quite healthy, compared to this time last year (2nd highest- 2016), and the highest since May 28, 2021.

The Administration has suggested another SPR release, but the SPR is currently unchanged, for the past 6 weeks.

Cooking With Natural Gas Feb 16 2023

I had briefly considered a seasonal hiatus regarding the NatGas reports, but something popped up in my in basket, telling me to hold on for at least another 6 weeks. The Groundhog didn't lie, just missed the timing!!

The Energy Information Administration released their weekly report Thursday.

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Again, drops in supplies were evident, yet still holding above year ago levels. West Coast and Mountain regions being the exceptions.

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Looking good so far.

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Prices keep slipping everywhere. Even in the UK, the price range is £1,800 ~ £2,300 (annual), compared to last summer's £3,600 ~ £5,400 (annual). 

Prices are low due to decreased demand, due to much warmer temps, etc. Prices are so low, the need for added storage is being reduced, companies are considering cutting back on drilling, etc.

Spring is in the air and everything looks great. Why am I being so sarcastic?

Climate change leads many to think solely in terms of global warming. On average, that would be correct. But climate change is all about extreme weather events. We acknowledge these events when it is due to significant flooding, droughts, hurricanes, extreme cold snaps, etc. 

However, we seem to disregard those mild temps. Much of Europe is in an extreme weather event. Law of averages will level that out, AND possibly in the near future. 

Good luck!!

Today's PPI Release... February 16th, 2022

The BLS has released the January Producer Price Index Report. (historical releases)

The Producer Price Index for final demand increased 0.7 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.2 percent in December 2022 and advanced 0.3 percent in November. (See table A.) On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended January 2023. 

In January, a 1.2-percent rise in prices for final demand goods led the advance in the final demand index. Prices for final demand services also moved higher, increasing 0.4 percent.

The index for final demand less foods, energy, and trade services rose 0.6 percent in January 2023, the largest advance since moving up 0.9 percent in March 2022. For the 12 months ended in January 2023, prices for final demand less foods, energy, and trade services increased 4.5 percent. 

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So the numbers were higher than expectations. I think someone under estimated those numbers. Last month's intermediates suggested a pop in final demand for this month. My estimate was wrong at +0.8% for the month. That was a miss to the high side. 

Next month is likely to surprise to the low side, possibly even a monthly negative, with annual at the +4.4% range.

Probably wrong again, but hopefully, to the high side... again.

Gasoline consumption through week of Feb-10-2023

Gasoline prices were (per AAA) were down 2.7¢ this week, to $3.418. A year ago, the price was $3.498. There were intermittent problems with refineries in different regions, that may have impacted current pump prices.

The 17 day streak of falling prices, ended today. Maybe another streak downward will soon start.

The seasonal consumption is edging up. (This is a four week moving average). It is -0.9% below one year ago levels. 

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st 2022, stands at +90.1M barrels. If you saw last week's report, that is up 1.3M barrels. This is a global market, so the global economy, as well as refinery output, is key to where pump prices will be.

Where will pump prices be next week? My inclination would be slightly lower, but that might be wishful thinking.

Crude Inventories continue to build- Feb 15 2023

Today's EIA.gov report. 

Crude stocks soared, up +16.2M barrels, from last week; Distillates slipped -1.2M Barrels; and Gasoline up +2.3M barrels. 

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WTI at $79.23, compared to $78.47, one week ago, and $89.81 a year ago. 

Refinery output slightly increased on this report, but still slightly below one year ago levels. 

For anyone interested, the U.S. has exported 470M barrels of crude and petroleum products, more than imported, since March 1, 2022. After two weeks of net imports, the margin is back to net export of +4.7M barrels.

Overall, crude stocks are quite healthy, compared to this time last year (3rd highest- 2016/2017), and the highest since June 4 2021.

The Administration has also indicated another release from the SPR, as mandated by law. The impact on gasoline prices would be slight, as refining is the bottleneck at this point... not supply of crude.

The January Retail Sales Report

ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES, January 2023 

Advance Estimates of U.S. Retail and Food Services

Advance estimates of U.S. retail and food services sales for January 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.0 billion, up 3.0 percent (±0.5 percent) from the previous month, and up 6.4 percent (±0.7 percent) above January 2022. Total sales for the November 2022 through January 2023 period were up 6.1 percent (±0.5 percent) from the same period a year ago. The November 2022 to December 2022 percent change was unrevised at down 1.1 percent (±0.3 percent).

Retail trade sales were up 2.3 percent (±0.5 percent) from December 2022, and up 3.9 percent (±0.5 percent) above last year. Food services and drinking places were up 25.2 percent (±2.6 percent) from January 2022, while general merchandise stores were up 4.5 percent (±0.2 percent) from last year. (emphasis added)

The data is not inflation adjusted. The data in this graph is...

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The clue being the emphasis I added in the clip from the release. Sales were up 6.4%, but so was inflation. Units of good, were basically the same as a year ago.

Over 68% of the total increase from December was in the following.

For anyone wishing to "annualize" today's numbers, we are in a rinse and repeat cycle, as indicated by previous year's numbers.

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To summarize... despite the "stellar" 3.0% rise in sales over December, we are back to January 2022, in goods purchased. The rest is inflation.

That's not bad, just not really "stellar", in my humble opinion.

Real Earnings report, February Reports 2023

The BLS has released the latest Real Earnings Report.

All employees

Real average hourly earnings for all employees decreased 0.2 percent from December to January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.3 percent in average hourly earnings combined with an increase of 0.5 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.7 percent over the month due to the change in real average hourly earnings combined with a 0.9-percent increase in the average workweek.  

Real average hourly earnings decreased 1.8 percent, seasonally adjusted, from January 2022 to January 2023. The change in real average hourly earnings combined with an increase of 0.3 percent in the average workweek resulted in a 1.5-percent decrease in real average weekly earnings over this period.

Treading water is the best way to describe the earnings report. The hourly rate is -3¢ lower than February 2020, with the weekly earnings at $2.45 more.

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I use February 2020, as the baseline. Everything thereafter was distorted by the type of jobs available, etc. 

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Real Earnings are adjusted for inflation. The question remains... what is the inflation outlook?

CPI DATA results, February Reports 2023

The BLS report was released this morning and it was a shade above consensus estimates. (historical releases)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5 percent in January on a seasonally adjusted basis, after increasing 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 6.4 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing. The food index increased 0.5 percent over the month with the food at home index rising 0.4 percent. The energy index increased 2.0 percent over the month as all major energy component indexes rose over the month.

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It would seem the food at home index is getting a lot of attention. The concept that things are really getting better in this area. 

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Aside from the dip in November, the prices have been increasing. Of course, that didn't prevent one wag from looking at the wrong line on the report and coming up with something called a 3 month average, annualized, as proof that things are trending downward. 

Except, the downward trend, sharply ended a couple of months ago, and is now on the rise. Using the correct line from the report, yields this...

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So yes, this method does indicate a number below the y/y, but is now indicating 2 consecutive months of upward movement. The M/M unadjusted was +0.8%, or annualized to 9.6%. Not far from the y/y rate of 10.1%.

I get the distinct impression the CPI coming up above expectations, is being rationalized with but, but, but arguments.

Not sure how these arguments can hold up, but we Americans are easily manipulated. Actually, people around the globe are much the same.

Cooking With Natural Gas Feb 9 2023

The Energy Information Administration released their weekly report Thursday.

Natural Gas storage is still within 5 year range for the USA.

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There was quite a drop in this last reporting period, but still remains in good shape on the 5 year scale.

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As for pricing, the Northeast and West Coast saw significant drops in prices, as outlined in the report. Generally speaking, the prices in the USA fell back to seasonal norms of 2 years ago. 

The situation in Europe has seen prices fall dramatically, but still quite elevated... compared to 2 years ago. 

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In any event, the winter has been mostly mild and translated into less than expected drawdowns. HOWEVER, no one can forecast next winter's weather, so expect some upward movement in Natural Gas prices... come mid summer. 

Gasoline consumption through week of 2-03-2023

Gasoline prices were (per AAA) were down 5.6¢ this week, to $3.445. A year ago, the price was $3.49.

Not sure how long this will last, although inventories are up and refinery output did slightly increase.

The however... is right on cue, as the seasonal consumption is edging up. (This is a four week moving average). It is -1.3% below one year ago levels. 

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st, stands at 88.8M barrels. If you saw last week's report, that is down 300K barrels. Somehow, I doubt that continues, although economic conditions might keep it downward in trajectory.

My completely ignorant prediction is... pump prices will be lower by this time next week. I won't go any further. 

Gasoline, Crude and Distillate Inventories - FEB-08-23

 Today's EIA.gov report. 

Crude stocks went up +2.4M barrels, from last week; Distillates up 2.9M Barrels; and Gasoline up 5M barrels. 

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WTI at $78.46, compared to $77.20, one week ago, and $87.90 a year ago. 

Refinery output slightly increased on this report, but still below one year ago levels. 

For anyone interested, the U.S. has exported 465.3M barrels of crude and petroleum products, more than imported, since March 1, 2022. This week's report marks two consecutive weeks with net deficit of import/export. 6.1M barrels to be precise.

Overall, crude stocks are quite healthy, compared to this time last year (4th highest), also being in the upper 5 year range and the highest since June 2021.

So what could go wrong?

Gasoline consumption through week of 1-27-2023

Gasoline prices were (per AAA) were up 2¢ this week, to $3.50. A year ago, the price was $3.38. There was a bit of good news, as prices seem to have plateaued. 

Not sure how long that will last, although inventories are up and refinery output did slightly increase.

The however... is right on cue, as the seasonal consumption is edging up. (This is a four week moving average).

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st, stands at 89.1M barrels. 3M of those barrels coming in the week leading up to this report. 

Gasoline, Crude and Distillate Inventories - FEB-1-23

Today's EIA.gov report. 

Crude stocks went up +4.1M barrels, from last week; Distillates up 2.3M Barrels; and Gasoline up 2.5M barrels. 

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WTI at $76.98, compared to $80.15, one week ago, and $86.69 a year ago. 

Refinery output slightly increased on this report, but still below one year ago levels. 

For anyone interested, the U.S. has exported 471M barrels of crude and petroleum products, more than imported, since March 1, 2022. Oddly, this week's report was the first since then to show a slight import/export deficit. -238K to be precise.