Review of PCE, GDP, etc., for end of May, 2023

 

There was a "surprise", as the PCE EX FOOD and ENERGY was higher than forecast. I am not sure why it was a surprise, as the forecast I saw... was for 4.7%. 

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

Perhaps the surprise was no downward revisions.

Personal consumption and outlays...

I would think the 0.0% rise in chained (2012) dollars for Disposable personal income, compared to PCE of same being at 0.5% would raise some eyebrows. But it is a credit driven economy, so what the heck. Going deeper in debt is the national pastime. 

Even the GDP was touted as going up from advance estimate of 1.1% to 1.4%, as being stellar. While ignoring the GDI for 4th quarter 2022, was revised sharply downward from -1.1% to -3.3%. The GDI for 1st quarter, 2023 came in at a -2.3% mark. 

In any case DPI now stands at +2.6% above the 1st Quarter, 2020 level. Presented without further editorial comment.

Natural Gas Inventory Report, May 27, 2023

The Energy Information Administration released their weekly report on Thursday.

Nationally, inventories are well above the 5 year average, although still well below in the Pacific region. substantial gains have taken place over the past few weeks.

Prices in all West Coast markets declined yesterday from last Wednesday. The price at PG&E Citygate in Northern California fell 95 cents, down from $4.13/MMBtu last Wednesday to $3.18/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 33 cents from $2.58/MMBtu last Wednesday to $2.25/MMBtu yesterday. The price at Sumas on the Canada-Washington border fell 21 cents from $1.83/MMBtu last Wednesday to $1.62/MMBtu yesterday. Natural gas consumption in the Western region decreased by 1% (0.1 Bcf/d), which was led by a 4% (0.1 Bcf/d) decrease in consumption in the electric power sector. In Northern California, PG&E’s total gas in storage was 12.6 billion cubic feet (Bcf) as of May 23, up from 5.8 Bcf on May 1.

Select inventories of EU and UK...

Prices continue to fall on the UK and EU markets. The UK spread of futures is annually at £1,453.60 ~ £2,191.06, with OFGEM setting the cap at £2,074. That cap is consistent with NatGas prices through October, with an added 3.7% cushion.  

Gasoline consumption per latest EIA data, May 24, 2023

Gasoline prices (per AAA) edged up this week, from $3.532 to $3.561. One year ago the price had ballooned to $4.598

Consumption increased +0.2% from last week, and stands 1.5% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, stands at +98.9M barrels. The import/export numbers have really not changed that much over the past few weeks and this past week showed more imports than exports, by 300K. 

Where will pump prices be next week? The crack spread is starting to edge up and the range appears biased to the upside. My estimate would be another 6.6¢ on top of current. 

Here's hoping I am wrong and prices will go down. Still, the likelihood of $4 national average is becoming less likely. 

Crude and Petroleum Product Inventories - May 24 2023

Crude stocks dropped rather dramatically -12.4M barrels, from last week, and remains down -4.0% 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 +1.0% above normal.

Distillates slid -500K; and Gasoline inventories slid -2.0M barrels. The SPR fell another -1.6M barrels. 

WTI is rising at $74.19, compared to $72.74, one week ago, and $106.82, one year ago. 

Refinery output continues to edge up on a weekly basis, as well as above year ago levels.

For anyone interested, the U.S. has exported 674.8M barrels of crude and petroleum products, more than imported, since March 1, 2022. For reference, since September 21, 2018, the import/export situation is at balance. 

Overall, crude stocks remain quite healthy, despite the major drop and compared to this time last year, with days supply at 28.7, compared to last year's 26.5 days.

Natural Gas Inventory Report, May 19, 2023

The Energy Information Administration released their weekly report on Thursday.

Nationally, inventories are well above the 5 year average, although still well below in the Pacific region. substantial gains have taken place over the past few weeks, having increased 27% in the past two weeks.

Pricing in the Pacific region did increase, but still remains within reach of other regions... which continue to be on the low side.

EU and UK continue to fare well, regarding inventories and remain well above both last year and seasonal 5 year averages.

While pricing in Europe has fallen, it continues to be extremely high, compared to pre-covid and pre-invasion.

An example would be the U.K., where the price range is currently £1,509~£2,264. I compare that to the extreme predictions of £3,600~£5,400 from about 21 months ago, and the price cap rollout of £2,500.

The good news is the £2,500 cap will stay into June. I would think the cap could be lowered, based on current market pricing, but that is just my silly opinion. It's not like there is a large storage of higher priced natgas to work through, for th UK.

Gasoline consumption per latest EIA data, May 17, 2023

Gasoline prices were (per AAA) were flat this week, from $3.531 to $3.532. So okay... one tenth of  once cent more. A year ago, the price had ballooned to $4.452. 

Consumption increased +0.4% from last week, and stands 1.6% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, stands at +99.2M barrels. The import/export numbers have really not changed that much over the past few weeks and this past week showed more exports than imports, by 600K. 

Where will pump prices be next week? There does not appear much change in pump prices, as the range might be in the ± 5¢ range.

Crude and Petroleum Product Inventories - May 17 2023

Today's EIA.gov report. 

Crude stocks jumped +5.0M barrels, from last week, and remains down -1.7% 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 +2.8% above normal.

Distillates held steady; and Gasoline inventories slid -1.3M barrels. The SPR fell another -2.4M barrels. 

WTI is steady at $72.74, compared to $72.92, one week ago, and $106.76, one year ago. 

Refinery output continues to edge up on a weekly basis, as well as above year ago levels.

For anyone interested, the U.S. has exported 659.1M barrels of crude and petroleum products, more than imported, since March 1, 2022.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 29.5, compared to last year's 26.8 days.

Distillates remain steady to last year.

5-16-23, Advance Retail Sales Report for April

Advance Monthly Sales for Retail and Food Services, April 2023.

Advance estimates of U.S. retail and food services sales for April 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.1 billion, up 0.4 percent (±0.5 percent)* from the previous month, and up 1.6 percent (±0.7 percent) above April 2022. Total sales for the February 2023 through April 2023 period were up 3.1 percent (±0.4 percent) from the same period a year ago. The February 2023 to March 2023 percent change was revised from down 0.6 percent (±0.5 percent) to down 0.7 percent (±0.2 percent).

Retail trade sales were up 0.4 percent (±0.5 percent)* from March 2023, and up 0.5 percent (±0.5 percent)* above last year. Nonstore retailers were up 8.0 percent (±1.2 percent) from last year, while food services and drinking places were up 9.4 percent (±2.5 percent) from April 2022.

As always, these figures are not adjusted for inflation, so +1.6% above year ago levels, when inflation adjusted comes down to something like -3.2%.

Now for those revisions. Yes, April was up 0.4% from previous month, which was revised from -0.6% to -0.7%. Doesn't seem bad, until you look at the previous month's revisions.

The revisions for January, February, March were sizable. So after those sizable revisions... you do end up with -0.7% for the previous month. 

We seem to be on a trend of downward revisions, and then extolling the current report. I suspect this month will be revised downward for next month... so next month can seem like a positive. 

So, I do not have a positive spin on this report.

As has been the case for several months, the "quantity" has remained stagnant, while spending increases. 

Adjusting for inflation, the actual volume of sales has remained rather flat for the past two years. 

There were winners and losers, but the revisions really distorted previous lists of winners and losers... such that I cannot attempt a realistic review. (Mostly laziness)!

Natural Gas Inventory Report, May 12, 2023

The Energy Information Administration released their weekly report on Thursday.

As usual the above graph does not capture the whole story by region. The west coast is still lagging, but beginning to gain ground. That should continue as west coast nat/gas pricing has fallen below the Henry Hub, which is now one of the highest in the U.S., which is at lows not seen since 2020.

European and United Kingdom storage continues to gain and remain at seasonally elevated levels.

The pricing for UK and TTF nat/gas, continues above "normal".

So far... so good!!

Producer Price Index May 2023 release for April Data.

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

The Producer Price Index for final demand advanced 0.2 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices fell 0.4 percent in March and were unchanged in February. On an unadjusted basis, the index for final demand moved up 2.3 percent for the 12 months ended in April. 

In April, 80 percent of the rise in the index for final demand is attributable to a 0.3-percent increase in prices for final demand services. The index for final demand goods advanced 0.2 percent.

Prices for final demand less foods, energy, and trade services rose 0.2 percent in April after inching up 0.1 percent in March. For the 12 months ended in April, the index for final demand less foods, energy, and trade services increased 3.4 percent.

Certainly, the PPI increases have slowed, but not sure all has been reflected in the CPI. Historically, the CPI is has risen slightly faster that PPI, yet the past 3 years has seen the PPI outdistance the CPI. This is reflected in the following graph.

The chart indicates the comparison of that 39 month period, compared to the preceding 109 months.

Reverting to normal requires a negative PPI and/or continued inflation for the next few months. 

It will take most of the year, before normal takes places, imho. 

Gasoline consumption per latest EIA data, May 10, 2023

Gasoline prices were (per AAA) were down -5.5¢ this week, to $3.531. A year ago, the price had ballooned to $4.374. I eventually projected a -10.2¢ decrease, and missed the mark. Those falling prices might be over, although not a sharp rise seems in the offing. Maybe +2.6¢ for the coming week.

Consumption increased +0.2% from last week, and stands 1.1% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, stands at +98.6M barrels. The import/export numbers have really not changed that much over the past few weeks and this past week showed more imports than exports, by 700K. 

Where will pump prices be next week? As stated earlier, maybe another +2.6¢ upward, or around $3.55.

That is a darn sight better than last year, which was about $4.50 a gallon 1 year ago, next week. 

Crude and Petroleum Product Inventories - May 10 2023

Today's EIA.gov report. 

Crude stocks jumped +2.9M barrels, from last week, and remains 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 +2.2% above normal.

Distillates fell -4.2M Barrels; and Gasoline inventories slid -3.1M barrels. The SPR fell another -2.9M barrels. 

WTI has risen to $72.92, compared to $68.41, one week ago, and $96.87, one year ago. 

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

For anyone interested, the U.S. has exported 645.6M barrels of crude and petroleum products, more than imported, since March 1, 2022.

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 29.3, compared to last year's 27.1 days.

Distillates remain steady to last year, despite this week's inventory drop.

BLS releases latest Real Earnings... May 10, 2023

The BLS has released the latest Real Earnings Report.

Real average hourly earnings for all employees increased 0.1 percent from March to April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.5 percent in average hourly earnings combined with an increase of 0.4 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.1 percent over the month due to the change in real average hourly earnings combined with no change in the average workweek.  

Real average hourly earnings decreased 0.5 percent, seasonally adjusted, from April 2022 to April 2023. The change in real average hourly earnings combined with a decrease of 0.6 percent in the average workweek resulted in a 1.1-percent decrease in real average weekly earnings over this period.

 Now for some charts...

This chart indicates the hourly earnings are back to December wages, which is one penny below February, 2020.

The following chart indicates 8¢ a week below Feb, 2020.

Up 14¢ an hour...

Up $5.52 weekly, from Feb. 2020.

As real wages are not yet back to Feb. 2020 levels, and is not keeping up with inflation... it is hard to imagine the claim that labor is causing inflation. In some sectors, but not overall, imho.

 

 

CPI Latest DATA results, May 10, 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 0.4 percent in April on a seasonally adjusted basis, after increasing 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.9 percent before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline. The increase in the gasoline index more than offset declines in other energy component indexes, and the energy index rose 0.6 percent in April. The food index was unchanged in April, as it was in March. The index for food at home fell 0.2 percent over the month while the index for food away from home rose 0.4 percent.

For the record, some rounding makes this appear much better. Last month's 5.0% was 4.98%, and this month's 4.9% is 4.93%.

The all items less food and energy index rose 5.5 percent over the last 12 months. (5.52%)

That compared to 5.6%, last month. (5.59%)

My own personal CPI...

Note that both CPI-W and Chained CPI edged up.

So once again, I should be happy with my index showing only 3.8%, but that is misleading. Remember, that COLA adjustment that came into effect in January, 2023? That made us whole back to 3rd quarter, 2021.

Any COLA for January, 2024, will most likely be in the >3.4% range. That 3.8% is operating at a loss.

As always, I keep track of my expenses, weighting, etc. Yours may be different.  

West Coast Natural Gas Inventories improving, but still below seasonal norms.

The Energy Information Administration released their weekly report on Thursday.

Quick check of pricing...

For those interested in a few EU countries and the UK, these are the latest stats...

Clearly the UK seems to have a need for more storage, but the UK does get considerable volumes from their own gas fields, as well as having LNG infrastructure. 

Overall, the EU currently is sitting with 61.04% of capacity. This is significantly above of last year and even the 5 year average.

Gasoline consumption eases per latest EIA data, May 3, 2023

Gasoline prices were (per AAA) were down -6.0¢ this week, to $3.586. A year ago, the price had ballooned to $4.204. I eventually projected a -5.6¢ decrease, then backed off. However, it is going the right direction and appears to trending even lower.

The  consumption slipped -0.9% from last week, and stands 2.0% above year ago numbers. (This is a four week moving average).

The import/export surplus of gasoline since last March 1st 2022, stands at +99.3M barrels. The import/export numbers have really not changed that much over the past few weeks. 

Where will pump prices be next week? Last week, I originally forecast a -5.6¢ decrease and got a -6.0¢ drop. I hope this continues, and evidence suggests it will.

How much... maybe another -10.2¢ at the pump. Probably won't get that, but it has been dropping faster than I anticipated, so hope it will continue and I decided to aim lower. Gotta hope!!

Barring some global catastrophe, major weather related issues, unplanned refinery outages, or pipeline problems... the USA pump price average should NOT get to $4 this year. 

So... something is likely to happen, to mess up things.

Crude and Petroleum Product Inventories - May 03 2023

Today's EIA.gov report. 

Crude stocks dropped -1.3M 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 +2.8% above normal.

Distillates fell -1.2M Barrels; and Gasoline increased +1.7M barrels. The SPR fell another -2.0M barrels.

WTI has fallen to $68.41, compared to $74.32, one week ago, and $100.90, one year ago. 

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

For anyone interested, the U.S. has exported 643.3M barrels of crude and petroleum products, more than imported, since March 1, 2022. 12.8M barrels this past week. It could be stated that this is a result of SPR releases. However, as mentioned previously, the SPR release was just above 2M barrels 

Overall, crude stocks remain quite healthy, compared to this time last year, with days supply at 29.5, 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. 

That's a good thing, I think.