Review of PCE, GDP, and other Nonsense, for end of April, 2023

I found some things of interest in the GDP and PCE reports, but first... the usual nonsense.

The sticky prices continue to be the story. 

The 4.6%, in today's report, takes us all the way back to October, 2021 and 4.3%. About the time a suggestion was made to end the use of transitory.

The following chart is a snapshot of this month's report, compared to last month and the revisions are highlighted in red. Nothing sinister, as this happens frequently as it is based on incomplete data, that becomes more complete as time passes. 

In short... this month's data could be revised up or down by next month.

In any case, the PCE came in at expectations. Services saved the day, but before you think of restaurants as services... it is, but on about 18%. Think housing and utilities, which were a bit hot, imho.

Unfortunately, the expectations are a bit higher for April's PCE report. PCE at 4.5 and core at 4.7

GDP came in a surprise 1.1% annualized. The forecast I was looking at, was around 2.0% annualized. The problem with the downside surprise, is the -1.8% forecast for 2nd and 3rd quarter, with -0.6% for the 4th quarter.

The shocker was in the change in private inventory sector, which was -1.6, compared to last month's +136.5. The reason for such a number is where the big story might be. But, I am too tired to contemplated that any further on a Friday night.

Have a nice weekend!

West Coast Natural Gas Inventories still way below normal, but showing signs of life.

The Energy Information Administration released their weekly report yesterday.

But...

Slight improvement, with West Coast still lagging year ago, and 5 year. Mountain appears out of the woods, with everyone else showing hefty inventories for time of year. 

For Europe, inventories are well above both last year (double) and near top of 5 year average.

I shall divurge for a moment. Crude oil prices are in the range of October, 2021... or pre invasion, sanctions, etc. Yet global consumption is rather steady. Part of this was reducing SPR by various countries, but I suspect that significant amounts of "sanctioned" crude is still hitting the market. Then there is OPEC+, theoretically reducing output. So... 

I suspect the countries doing the sanctioning are ignoring these stream adjustments, as it benefits these countries, while talking a hard line. Virtue signaling has come to the sanctions regime, and was likely there... from the start.

On to the natgas pricing...

First up the USA. Prices have remained rather stable at the Henry Hub for nearly 3 months, with the average about $2.15MMBtu. This is more "normal" for pre Ukraine invasion pricing. The replenishment cost of the inventory is down, so the consumers should continue to see some easing.

For Europe the current pricing is still double "normal". It seems to have settled into a narrow band in the past 6 weeks. With the inventories heavy with very high priced natgas, the outlook for consumer relief is much farther down the road. 

Can Europe and the U.K. weather another winter? 

Gasoline consumption through last Friday, APR-21-2023

Gasoline prices were (per AAA) were down -3.8¢ this week, to $3.646. A year ago, the price had ballooned to $4.131. I eventually projected a -5.0¢ decrease. It is going the right direction.

The  consumption edged up a healthy +0.6% from last week, and jumped 6.8% above year ago numbers. (This is a four week moving average). 

The import/export surplus of gasoline since last March 1st 2022, stands at +99M barrels. This is a global market, so the global economy, as well as refinery output, is key to where pump prices will be. I should note this figure represents a massive 2M barrel drop from last week. 

Where will pump prices be next week? Last week, I forecast a -5.0¢ decrease and got a -3.8¢ drop. I hope this continues, and evidence suggests it will.

How much... maybe another -5.6¢ at the pump.

EDIT 4-29-2023: It has fallen -3.4¢, as of this AM, but appears to be near bottom at $3.615. Darn it! However not seeing any rapid rises... at this point.

The good news, is the predictions for a national average $4 pump price by March, then April... is looking doubtful for May.

A lot depends on the gasoline import/export balance. We saw what a surge in exports over imports could result in last year with prices jumping big time. The import/export margin has narrowed considerably, with the result in easing of pump prices.

I really wish I had a crystal ball and could tell which way the liquid gold is flowing... but I don't. All I can do is watch the future's market for some sense of what is happening.

Crude and Petroleum Product Inventories - APR 26 2023

Today's EIA.gov report. 

Crude stocks dropped a whopping -5.0M barrels, from last week, and pulled it down -2.6% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +2.7% above normal.

Distillates fell -577K Barrels; and Gasoline fell -2.4M barrels. The SPR fell another -1.0M barrels.

WTI has fallen to $74.32, compared to $79.31, one week ago, and $100.41, one year ago. OPEC + did announce substantial output cuts, but the when, where and who, remains to be seen. 

I am still suspicious, which is basically me not being able to make sense of the price drop. It's almost as if someone, somewhere is not actually cutting output, or at least not in the near term.

Refinery output edged up on a weekly basis, and very near year ago levels.

For anyone interested, the U.S. has exported 621.5M barrels of crude and petroleum products, more than imported, since March 1, 2022. 11.8M barrels this past week. It could be stated that this is a result of SPR releases. Since that date, the releases have been 213M barrels, so that is about 1/3 of the reason. 

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 29.3, compared to last year's 26.4 days.

While crude inventories remain in decent shape, the refining part of the equation is still lagging, compared to one year ago. Yet pump prices are edging downward. 

More later.

The Answer is Eight

The amazing things that can occupy our minds and divide us. 

8÷2(4-2)=

For some strange reason, folks think PEMDAS means multiplication comes before division.

From Mathnasium...

As you read them... from left to right. NOT one left to right, and then the other. 

Just a little ditty, for future reference, as these things seem to occupy the minds of so many. 

8÷2(4-2)=

Step one. Convert the Parenthesis (4-2), which becomes (2), the result being 8÷2(2)=

Step two. Going left to right the first MD is a D, so solve that division. Result is 4(2)=

Step three. Going left to right the next MD, is an M, so the result is 4x2=8.

Why is this so difficult, and why does there need to be so much back and forth, over something so simple?

West Coast Natural Gas Inventories still way below normal, but showing a slight rise.

The Energy Information Administration released their weekly report yesterday.

As usual, the overall indicates above seasonal 5 year average. Some areas are in much better shape than others. 

In the West, prices generally declined this week, except for the price at PG&E Citygate in Northern California, which rose 38 cents from $5.79/MMBtu last Wednesday to $6.17/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 33 cents from $7.99/MMBtu last Wednesday to $7.66/MMBtu yesterday. In the Pacific Northwest, the price at Sumas on the Canada-Washington border fell $1.17 from $4.80/MMBtu last Wednesday to $3.63/MMBtu yesterday. Southern California Gas (SoCalGas) began planned maintenance on Line 5000 on Monday, April 17, which will curtail 630 million cubic feet per day of natural gas flows through April 28.

Still about triple the price of Henry Hub.

Elsewhere...

According to news reports, the UK storage is sufficient to last through the summer. Not sure what that even means, as future's prices seem to indicate a rise. In any case, the so called cap currently in place of £2,500 is likely to show little easing, in my humble opinion.

German inventories are holding steady at 64%. It should be noted the winter was mild, plus consumption was reduced... largely by industry, according to Der Spiegel. Can that extend through another year? If productivity was not impacted... were these industries wasteful? 

Gasoline consumption through last Friday, APR-14-2023

Gasoline prices were (per AAA) were up 6.3¢ this week, to $3.684. A year ago, the price had ballooned to $4.101. I projected a 12.4¢ increase, and didn't get it. Hooray! Not a bad thing.

The  consumption edged up a healthy +0.4% from last week, and jumped 7.1% above year ago numbers. (This is a four week moving average).  

If you are really into this type of thing... the import/export surplus of gasoline since last March 1st 2022, stands at +101M 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? Last week, I forecast a +12.4¢ increase and got a +6.3¢ rise. I hope the reality is still less than my expectations.

EDITED APR-21-2023, SEE BELOW. So, it looks like a +5¢ increase at the pump. Here's hoping I am wrong again and the increase is less than half that, or maybe even lower!!

As for the outlook of $4 per gallon at the pump nationally... maybe by Memorial Day weekend, or the week preceding.

In any case, the national average has to rise, given the Gasoline Reid Vapor Pressure change. The outlook for the national average through the summer, is nowhere near $5. 

EDIT: THE +5¢ PROJECTED, IS NOW FLAT TO -5¢ FOR THE NATIONAL AVERAGE. 

Crude and Petroleum Product Inventories - APR 19 2023

 Today's EIA.gov report. 

Crude stocks dropped a whopping -4.6M barrels, from last week, and pulled it down -0.9% from the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +4.3% above normal.

Distillates fell -355K Barrels; and Gasoline increased +1.3M barrels. The SPR fell another -1.6M barrels.

WTI has fallen to $79.31, compared to $83.21, one week ago, and $106.41, one year ago. OPEC + did announce substantial output cuts, but the when, where and who, remains to be seen. The price jump is basically an expectation of China's economy regaining footing. Although the drop in price from last week is suspicious. 

Definition of suspicious, is basically me not being able to make sense of the price drop. It's almost as if someone, somewhere is not actually cutting output, or at least not in the near term.

Refinery output edged up on a weekly basis, but still below one year ago levels. I would make an assumption that the lag is still due to refinery maintenance.

For anyone interested, the U.S. has exported 609.7M barrels of crude and petroleum products, more than imported, since March 1, 2022. 17.8M barrels this past week. It could be stated that this is a result of SPR releases. Since that date, the releases have been 212M barrels, so that is about 1/3 of the reason. 

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 29.7, compared to last year's 26.2 days.

While crude inventories remain in decent shape, the refining part of the equation is still lagging, compared to one year ago. 

West Coast Natural Gas Inventories still way below normal

The Energy Information Administration released their weekly report yesterday.

The graph indicates at the upper end of the 5 year, a deeper dive results in something like this...

Mountain and especially the West Coast is way below normal, which is also reflected in the pricing of that region, compared to others.

Although falling week over week, prices in West Coast markets remain elevated and are currently the highest in the United States. The price at SoCal Citygate in Southern California decreased 66 cents from $8.65/MMBtu last Wednesday to $7.99/MMBtu yesterday, and the price at PG&E Citygate in Northern California fell $1.52, down from $7.31/MMBtu last Wednesday to $5.79/MMBtu yesterday.

Generally speaking, about triple the rest of the nation. Some specific issues were colder than normal weather, this past winter, as well as numerous pipeline problems. 

Elsewhere...

TTF and UKG prices continue to ease down across the board. Henry Hub is still drifting lower into prices not seen in over 30 months. As a consumer, I consider that a good thing... if it gets passed on.

Haven't checked UK storage, but Germany is holding steady at 64%, which is more than double this time last year and near 50% higher than the 2016~2020 average for same period. 

It is hard to imagine a repeat of last year's gyrations and LNG shipments don't seem to be affecting Henry Hub. That is not to infer European energy costs are substantially waning. The consumer will likely continue to feel the shock for quite some time. Sorry!

Germany at 64% storage has to recoup the cost of that storage, which was really quite high... and continues to be quite high. 

 

4-14-23, Advance Retail Sales Report for March

Advance Monthly Sales for Retail and Food Services, March 2023

Advance estimates of U.S. retail and food services sales for March 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $691.7 billion, down 1.0 percent (±0.5 percent) from the previous month, but up 2.9 percent (±0.7 percent) above March 2022. Total sales for the January 2023 through March 2023 period were up 5.4 percent (±0.4 percent) from the same period a year ago. The January 2023 to February 2023 percent change was revised from down 0.4 percent (±0.5 percent)* to down 0.2 percent (±0.1 percent).

Retail trade sales were down 1.2 percent (±0.5 percent) from February 2023, but up 1.5 percent (±0.5 percent) above last year. Nonstore retailers were up 12.3 percent (±1.2 percent) from last year, while food services and drinking places were up 13.0 percent (±2.6 percent) from March 2022.

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

Plain and simple... the quantity goods being bought, has remained rather flat for several months. Inflation has made for the increases.

but up 2.9 percent (±0.7 percent) above March 2022

Again, that is before inflation is taken in consideration. The CPI-U, was 5.0%. And the M/M CPI-U was +0.1% seasonally adjusted. 

For the month to month, with inflation adjustments... 

Its not really bad news, as nothing as fallen off a cliff. With this being tax refund season... it should remain stable for a while longer.

It does appear that home renovation, appliances, and electronic items have somewhat paused. Restaurant and bars, seemed to slip last month, with groceries edging up. On the year to year, groceries are still down and the restaurant and bar category is running ahead.

I was confused over the m/m drop in gasoline and service stations, but suspect that is more to do with "seasonal" adjustments, rather than reality. But it may be we are not going into the convenient store for a snack and rather stopping at a drive thru restaurant.

The whole point being... sales were up, but stuff bought actually slipped -1.3% on the month and -1.9% on the year. 

It is too early to predict the sky is falling. I suspect some turnaround with the aforementioned tax refund season upon us. 

The oddity to me, is the difference in nominal sales from February 2020, to current. Sales have increased a whopping +31.5% during an inflationary period of 17.7%. That leaves 13.8% coming from somewhere. 

I keep coming back to the various simulus packages and the so called multipler effect. Which then leads me to wonder, when will it end. I suspect we are getting closer.

That is not to say, we are going to fall off a cliff, but rather some contraction in the economy, is likely.

Producer Price Index Apr 2023 release for March Data.

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

The Producer Price Index for final demand declined 0.5 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in February and increased 0.4 percent in January. (See table A.) On an unadjusted basis, the index for final demand advanced 2.7 percent for the 12 months ended in March. 

In March, two-thirds of the decline in the index for final demand can be attributed to a 1.0-percent decrease in prices for final demand goods. The index for final demand services moved down 0.3 percent.

Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March after rising 0.2 percent in February. For the 12 months ended in March, the index for final demand less foods, energy, and trade services increased 3.6 percent.

Last month's projection...

Still, I would anticipate March to be year over year of +3.0%, and month to month being flat. 

Not too bad for a complete idiot.

Now for my version of spin, or misdirection, or whatever. I tend to look for things that impact me, so my version... may not match your version.

Off the top, the energy index was almost 3/4 of that -0.5% m/m decline in final demand. While most everyone thinks of gasoline, it did rise in March and will continue to do so... maybe through May. It will not achieve last year's June highs, in my opinion. 

The story in energy is natural gas. This will show declines into the summer. I don't think it will achieve last summer's high, but it might come close. The upshot being a continuation of m/m declines and annual rates declining into that period.

Currently the PPI final demand number is sitting at 20.8% above the April, 2020 low. The CPI, for reference, is 17.7% above that same period. I would not project any significant correlation between those two figures.

March's number, per the PPIFIS, stands at 140.865, compared to last June's 140.156. It is still +0.5% from June. Clearly, the y/y will continue to decline, but how far will it decline?

Being someone that consumes food on a regular basis, I should point out the final demand on food was +0.6% m/m. That is stark contrast from yesterday's CPI "food at home", at -0.3%. That concerns me more than the rise in current pump prices. 

My review of the PPI data, leads me to believe the (core) sticky prices are stuck in the near term. The year over year, however, will continue to fall. At some part, core will also begin to slip.

Next month will likely show another -0.2% m/m, and a +2.0% y/y. No doubt the y/y will likely turn negative in the next few months, largely due to energy. At some point in the summer, the sticky core will have to pitch in, to keep the numbers in decline.

BUT, if that occurs, is it due to slowing demand?

Smarter minds will have to weigh in on that question.

Gasoline consumption through last Friday, APR-07-2023

Gasoline prices were (per AAA) were up 9.2¢ this week, to $3.621. A year ago, the price had ballooned to $4.098. I projected a 12.5¢ increase, and didn't get it. Hooray! Not a bad thing.

The  consumption edged up a healthy +3.1% from last week, and jumped 6.8% above year ago numbers. (This is a four week moving average).  

If you are really into this type of thing... the import/export surplus of gasoline since last March 1st 2022, stands at +99.3M 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? Last week, I forecast a +12.5¢ increase and got a +9.2¢ rise. I hope the reality is still less than my expectations.

So, it looks like a +12.4¢ increase at the pump. Here's hoping I am wrong.

As for the outlook of $4 per gallon at the pump nationally... 1st or 2nd week of May. 

Crude and Petroleum Product Inventories - APR 12 2023

Today's EIA.gov report. 

Crude stocks grew, +597K barrels, from last week, although still at +1.0% above the 5 year seasonal average. It should be noted the 5 year average includes the abnormal 2020 and 2021 number. Otherwise, the current inventory is nearly +6.0% above normal.

Distillates fell -606K Barrels; and Gasoline slid another -330K barrels. The SPR fell -1.6M barrels.

WTI has risen to $83.21, compared to $80.54, one week ago, and $99.40, one year ago. OPEC + did announce substantial output cuts, but the when, where and who, remains to be seen. The price jump is basically an expectation of China's economy regaining footing. 

Refinery output edged up on a weekly basis, but still below one year ago levels. I would make an assumption that the lag is due to refinery maintenance.

For anyone interested, the U.S. has exported 591.9M barrels of crude and petroleum products, more than imported, since March 1, 2022. 1.4M barrels this past week, which is well below previous weeks. It appears to be in crude exports being abnormally low. Maybe a tanker didn't sail on time?

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 30.2, compared to last year's 26.7 days.

While crude inventories remain in decent shape, the refining part of the equation is still lagging, compared to one year ago. 

I am, also, puzzled by the gasoline side, as importing more than exporting... is somewhat of an anomaly.

Real Earnings: April Release of March 2023 Data

The BLS has released the latest Real Earnings Report. 

All employees

Real average hourly earnings for all employees increased 0.2 percent from February to March, 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 0.1 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased 0.1 percent over the month due to the change in real average hourly earnings combined with a 0.3-percent decrease in the average workweek.  

Real average hourly earnings decreased 0.7 percent, seasonally adjusted, from March 2022 to March 2023. The change in real average hourly earnings combined with a decrease of 0.9 percent in the average workweek resulted in a 1.6-percent decrease in real average weekly earnings over this period.

Now for some comparison graphs, dating back to February 2020, or pre-covid. It is important to compare to that date, as the rates were distorted with all the layoffs early on. Remember... A lot of people were working from home, etc. A lot of people did not have that option.

The above rate is still a shade below February 2020.

The above rate is still a shade below February 2020.

The above rate is 14¢ higher than February 2020.

The above rate is $6.50 higher than February 2020.

It is better than losing ground, but not sure it is a sign of "real" progress.

CPI Latest DATA results, Reports for March 2023

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

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in March on a seasonally adjusted basis, after increasing 0.4 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.0 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase. This more than offset a decline in the energy index, which decreased 3.5 percent over the month as all major energy component indexes declined. The food index was unchanged in March with the food at home index falling 0.3 percent.

The index for all items less food and energy rose 0.4 percent in March, after rising 0.5 percent in February. Indexes which increased in March include shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. The index for medical care and the index for used cars and trucks were among those that decreased over the month.

A couple of notes... "all major components declined". That is with "seasonal" adjustment. While the overall index eased, the gasoline component was up +1.0% and is currently on the rise for April, as in +3.0%. Be careful of the spin.

Food at home, did drop, but that food away from home... seems to be hanging tough.

The real story is sticky prices, or Core, or CPI ex- food and energy. It actually rose on an annual basis, and was above expectations on the monthly. It would have been even worse, but the Medical side inexplicably fell. If it had remained flat, you could add another +0.1% to that Core.

Simply looking at the core at 5.6%, with the overall being 5.0%... should tell you that drops in energy is where the most savings are. Further browsing through the numbers, indicate most items, other than gasoline are where those savings are. How much longer can that last?

The forecast indicates an increase in Core, with the overall remaining at current level of +5.0%. So clearly the big brains think it will continue. The may be right, but the politics of pump prices, tends to overshadow all the other energy components. 

Generally speaking, those winter heating bills drop and consumers don't really recognize the cost per unit difference. Gasoline is right in your face at the pump... and everyone seems to recognize that cost per unit.

My own personal CPI...

I guess I should be happy with the +0.1% M/M, and +4.0% Y/Y, but I don't like inflation of any type. 

Natural Gas Inventories look to be good, except on the left coast.

The Energy Information Administration released their weekly report Thursday.

In great shape, except for the west coast...

So prices are down in most regions, with the exception of above. With warmer weather, some improvement should occur in those regions.

However, that leaves much of the country outside the Mountain and Pacific regions at +48.1% above this time last year, and +31.6% above the 5 year seasonal average. Including the Mountain and Pacific regions, you get...

So it really should come as no surprise that Henry Hub prices are this low. At some point, the average price of inventory is reduced enough to feed into the regular economy... and slowly bring down consumer expenses, related to natural gas. It might have started in February. 

The question with the prices this low... will household energy prices reflect this in the near future? IF prices continue at this low point, then it would not be unreasonable to expect that part of the energy component in the CPI, to retrace back to spring 2021... by late summer. 

Could they go lower? That might be wishful thinking.

The same cannot be said for Europe. Futures pricing is still triple 2 years ago. Considering the hefty condition of their inventories and also considering the likely average price of those inventories... Triple may become the norm. That is without the anticipated rise going into next winter.

Not sure how all this will play out, with the price schemes, caps, subsidies, etc. and future implications of a return to the principles of the Maastricht Treaty. 

Gasoline consumption through last Friday, Mar-31-2023

Gasoline prices were (per AAA) were up 6.7¢ this week, to $3.528. A year ago, the price had ballooned to $4.176. I projected a 4.5¢ increase, and wish it hadn't happened.

The  consumption edged up a healthy +1.4% from last week, and jumped 3.3% above year ago numbers. (This is a four week moving average). 

Click on image to enlarge

If you are really into this type of thing... the import/export surplus of gasoline since last March 1st 2022, stands at +99.5M 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? Last week, I forecast a +4.5¢ increase and got a +6.7¢ rise. I hope my inability to accurately predict prices remains opposite of what takes place. At least for the coming week. 

So, it looks like a +12.5¢ increase at the pump. Here's hoping I am wrong.

Normally, consumption eases during this current period, but warmer than seasonal weather must be enticing those with cabin fever... to drive.

Will the national average get to $5? I really want to say no, but with gasoline inventory below this time last year, consumption above this time last year, and refinery output below this time last year... It is hard to build a case against $5 gasoline. 

We have to cross the $4 threshold and that will likely happen sometime near the first of May. That is just me guessing and pulling a date out of thin air. 

I drive less that 1,000 miles a year, so don't even know why I watch this stuff so closely. 

Crude Inventories continue to drop - APR 05 2023

Today's EIA.gov report. 

Crude stocks dropped, -3.8M barrels, from last week, although still at +3.5% above the 5 year seasonal average; Distillates fell -3.6M Barrels; and Gasoline slid another -4.1M barrels. The SPR fell -404K barrels, ending a 10 week pause.

WTI has risen to $80.54, compared to $72.71, one week ago, and $100.68 a year ago. OPEC + did announce substantial output cuts, but the when, where and who, remains to be seen. The price jump was basically an expectation of China's economy regaining footing. 

Refinery output edged up on a weekly basis, but still below one year ago levels. I would make an assumption that the lag is due to refinery maintenance.

For anyone interested, the U.S. has exported 590.5M barrels of crude and petroleum products, more than imported, since March 1, 2022. 14.8M barrels this past week.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 30.2, compared to last year's 26.0 days.

While crude inventories remain in decent shape, the refining part of the equation is lagging. More on that as soon as I can run the numbers.

Review of PCE, GDP, and other Nonsense

So here is the various inflation numbers...

Click image to enlarge

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

Click image to enlarge

For reference only, the PCE ex food and energy, has increased 10.3%, from February, 2021. The cpi-u ex food and energy, increased 12.3% over that period. The CPI including food and energy has risen 14.4%. 

I guess my 1st point being... back in the transitory days of inflation, with it around 5.5%, the prices did not stop rising. So 5.5%, really was transitory. The March data should be slightly below that transitory number, yet I don't expect those proponents of transitory to come out saying... see I told you so. 

The 2nd point being... we were upset when inflation was eroding our purchasing power between 4%~5%, so the sticky prices (ex food and energy) seem to be stuck in that range. Smarter minds than me, forecast core PCE to achieve that noble 2% target in late 2024.

I am beginning to think a recession will be necessary to bring down those sticky prices, although those smart minds are already forecasting 3 consecutive quarters of negative GDP, beginning in 2nd Qtr, 2023. Which brings me to GDP.

Being a glass half full kind of guy, I look for the potential problem areas in reports, such as the GDP. It strikes me that the increase in inventories and the net deficit of imports/exports, erases that 2.6% annualized to 0%.

Going forward, I would anticipate the net deficit in imports/exports to slightly increase for the 1st quarter, and inventories to remain steady or slightly increase. Which requires the other categories to do the heavy lifting. You guessed it... it largely falls on the consumer.

I have completely wasted a few hours on this article, and it is time to enjoy Saturday.