Review of April 2024 data, 1Q GDP revisions, PCE and personal income

The monthly summary is not so bad, actually.

The best that can be said, is inflation has stabilized, with a further slowing in the cards, by end of the year.

What is striking, is the downward tilt in disposable income AND personal consumption expenditures.

If you carefully look, the previous month was also revised downward, for those two items.

If spending is slowing, it would follow that demand is slowing, which would/should... slow inflation going forward.

As for the GDP revision... it was not unexpected. The story has now become the service sector. Not terribly worrisome, but what caught my eye, is the trade imbalance, which jumped. 

Oh well, that's a wrap for May.

Comparison of Inflation in selected countries- May, 2024 Edition

With the United Kingdom, Canada and EUstats release of April data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat with the exception of April-2024. That data was calculated by me]

Inflation across these countries are now very similar, after some issues early on.

A reminder, that U.S. inflation rose upward in advance of those other countries.

While it has been popular, of late to say inflation was everywhere... it wasn't until it was. The period between was called "transistory".

There were factors unique to the U.S., as well as those other countries in the EU, as well as the U.K.

Unique to the E.U. and U.K. were natural gas issues over Ukraine/Russia

Unique to the U.S. were...

• Rapid roll out of vaccines
• Proclamations of Covid being whipped.
• Massive stimulus mailed directly to households, plus government programs
• Refinery outages  in Texas.
• Am eminent dock workers strike, that didn't take place.

Common to both...

• Low petroleum and petroleum product inventories
• Container congestion, due to empty containers in all the wrong places.
• European decision to curtail NG and petroleum imports from Russia.

So the finger pointing becomes clear, when comparing the conditions that were in place, the actions taken + direct results, etc.

This Week in Petroleum Summary May 30th, 2024 per EIA.GOV

This week's full report.

Gasoline fell -1.3¢ for the week, and is now below year ago levels, by 1¢, or -0.3%. Consumption did edge up again per this past report, although still trailing year ago levels.

Inventories rose across the board, with crude inventory up +844K barrels; Distillates up +2.5M barrels; Gasoline up +2M barrels. Total Petroleum + products +SPR rose +13.1M barrels.

Refinery output rose the past week, but still slightly trails year ago numbers.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread has fallen from last week's $26.03, to $23.19. Gasoline at $14.35 from last week's $16.13. Distillates fell to $8.84, compared to last week's $9.90.

The trends suggest a continuing drift downward in pump prices, imho.

Way too early projections for C.O.L.A. (May, 2024 edition)

The C.O.L.A. for 2025 won't be announced until October 10th, 2024, but I have read some early speculation.

In mid-May, following fresh inflation data, the Senior Citizens League upped its 2025 Social Security COLA estimate ever so slightly to 2.66%. That's an improvement from 1.75%, but it may read as a disappointment in light of more recent COLAs.

I'll just jump in with a current projection of 2.7% to 3.0%.

Naturally, it is way too early, but I can join in on the fun of speculation. 

Yes, House prices are more than in 1980

I ran across an article and thread about housing costs compared to 1980. Generally, it follows the median price and interest rates.

I used, the following as sources for data...

• stlouisfed.org
• census.gov
• bls.gov

I'll start with the median house price (stlouisfed.org), accompanied by median house size (square feet-census.gov).

WOW! that is a big jump. According to BLS.gov, that 1,600 square foot home of 1980, should cost about $252,521.37 today.

Yes but the houses are much bigger today... so that $252,521.37 for that 1,600 square foot home should bounce to $378,782.055 for the 2,400 square foot home. 

Still about $42,000 over priced, unless something about that median home has changed.

The Census Bureau, tells us that the average double of bathrooms have doubled over that period. Wow! Garages are more prevalent and larger.

Once you wrap your head around that, it does not seem so unreasonable. However, in a time when families are smaller... why are houses so much bigger?

Is it need v want? More than likely, it is want.

Of course, there is the "build it and they will come" mentality. Afterall, developers realized that a 100 X 100 lot requires the same investment in storm/sanity sewers; utilities; streets; lighting, etc. A larger house would gather a larger profit... than a smaller house. 

Municipalities in many cases... set development standards on type of housing, etc. With an eye on real estate tax revenue. The bigger house just generates more tax revenue. 

And not just from the house.

Which house would more likely have a fairly new family sedan such as a Camry and which would more likely have a Lexus. Compare the type of boats, etc. The list goes on.

So yes, houses cost more, but I would offer the suggestion that pride and appearance prevails over needs.

This Week in Petroleum Summary May 22nd, 2024 per EIA.GOV

This week's full report.

Gasoline rose +0.4¢ for the week, but remains  up +7.1¢ from year ago level. Consumption did edge up again per this past report, although still trailing year ago levels.

Inventories were mixed, with crude inventory up +1.8M barrels; Distillates up +379K barrels; Gasoline down -945K barrels. Total Petroleum + products +SPR rose +8.5M barrels.

Refinery output continues to lag behind year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread has risen slightly from last week's $25.35, to $26.03. Gasoline at $16.13 from last week's $15.97. Distillates rose to $9.90, compared to last week's $9.39.

Despite today's uptick at the pumps, the trend suggests prices drifting lower.

A Foray into the 2024 Presidential Election, Part XVI

Really not seeing any major shifts, although the Minnesota margin widened ever so slightly. Still too difficult to read.

The unadjusted polls indicate no major shifts.

It does appear the numbers are slipping for Trump, but Biden is slipping more. Previous blog indicated 43.9%~43.4%, infavor of Trump. Trump is down -0.1%, with Biden down -0.3%.

In any case, the electoral map indicates 312 EVs for Trump, and 216 Evs for Biden. Minnesota's 10 remains in toss-up territory. 

We are still 170 days from the election, and things could change... although a major shift is required, when evaluating previous election polls at this time, compared to results.

My electricity bills over time (May, 2024 Edition)

My electricity usage over time. I track many things to monitor my inflation versus the CPI.

On a 12 month rolling average, my costs are down -7.1% from previous year.

While it is improving... long gone are the days of less than $100 per month moving average.

This Week in Petroleum Summary May 15th, 2024 per EIA.GOV

This week's full report.

Gasoline fell -3.3¢ for the week, but remains +7.2¢ from year ago level. Consumption did edge up again per this past report.

Inventories were down across the board, except total petroleum + products, with crude down -2.5M barrels; Distillates down 45K; Gasoline down -235K.

Refinery output continues to lag, compared to year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread has dropped from last week's $26.46, to $25.35. Gasoline at $15.97 from last week's $16.43. Distillates slid to $9.39, compared to last week's $10.03.

A drift lower on pump prices is easy to imagine at this point. Things can change rapidly. It does seem to indicate consumption running below year ago levels and the why... is the question in my mind.

5/15/2024, Advance Retail Sales Report for April Data

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

Advance estimates of U.S. retail and food services sales for April 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $705.2 billion, virtually unchanged (±0.4 percent)* from the previous month, but up 3.0 percent (±0.5 percent) above April 2023. Total sales for the February 2024 through April 2024 period were up 3.0 percent (±0.5 percent) from the same period a year ago. The February 2024 to March 2024 percent change was revised from up 0.7 percent (±0.5 percent) to up 0.6 percent (±0.1 percent).

Retail trade sales were virtually unchanged (±0.4 percent)* from March 2024, but up 2.7 percent (±0.5 percent) above last year. Nonstore retailers were up 7.5 percent (±1.6 percent) from last year, while food services and drinking places were up 5.5 percent (±2.1 percent) from April 2023.

WOW! The revisions were substantial and long term...

Can't remember such a sea of downward revisions.

The result, when adjusted for inflation...

Whatever the reasons for the downward revisions, the trend line for actual purchases, when adjusted for inflation is slipping downward.

There clearly is a demand drop, but whether due to inflation causing budgets to tighten... who really knows.

It should be noted the following groupings, do seem to be waning on both annual and month to month...

• Furniture and home furniture stores
• Health and personal care stores
• Sporting goods, hobby, musical etc.

For whatever reason, we do seem to be cutting back in some areas.

 

BLS Data Dump. CPI - May 15th, 2024 (part 2)

On to the Real Earnings.

There seems to be a downward trend, across the board, even with downward revisions of previous months data. An increase of 2¢ from February, 2020. It is important to adhere to that timing, as it was before the disruption of the workforce, cue to covid.

It seems that real earnings have slipped from the December/January timeframe.

All the other reports seem to indicate a shift in purchasing choices.

BLS Data Dump. CPI - May 15th, 2024 (part 1)

First up is the BLS Report for CPI...(historical releases)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, after rising 0.4 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.

The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index was unchanged in April. The food at home index declined 0.2 percent, while the food away from home index rose 0.3 percent over the month.

Here is the unadjusted CPI for the past 12 months...

My own personal CPI rose 3.1% Y/Y and 0.4% on the month...

Taking a look at the current report card...

Food was mentioned in the report...

Hidden in all those numbers and weightings... food away from home is barely above January, 2021 numbers. That is NOT adjusted for inflation, but in current dollars. I can't help but think the entities making up the food away from home category... are struggling, as the dollars spent does not come close to the inflation rate. 

So the overall inflation does seem to be slowly easing, and next months report "should" indicate a further slowing. 

Let's hope!

PPI MAY 2024 release April 2024 Data

The BLS has released the April, 2024 Producer Price Index Report.  (historical releases)

The Producer Price Index for final demand rose 0.5 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices declined 0.1 percent in March and advanced 0.6 percent in February. (See table A.) On an unadjusted basis, the index for final demand moved up 2.2 percent for the 12 months ended in April, the largest increase since rising 2.3 percent for the 12 months ended April 2023.

Nearly three-quarters of the April advance in final demand prices is attributable to a 0.6-percent increase in the index for final demand services. Prices for final demand goods moved up 0.4 percent.

The index for final demand less foods, energy, and trade services moved up 0.4 percent in April after rising 0.2 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services increased 3.1 percent, the largest advance since climbing 3.4 percent for the 12 months ended April 2023.

PPI Final Demand...

The 2.2% rise on year to year, increased from last month and is the new highest since April, 2023. The rise was tempered by a drop in energy prices, and best of all... food. The latter showing the first decrease in 3 months, after sharp increases. We will wait and see how that is reflected in grocery store prices.

Despite the slight rise year over year, the troubling part is month over month, which reversed last month's pullback. +0.5% v -0.1%.

The where can be found in the detailed report. If the month to month was +0.5%, look for the areas more than that figure, to determine the inflationary pressures.

This Week in Petroleum Summary May 8th, 2024 per EIA.GOV

This week's full report.

Gasoline fell -2.3¢ for the week, but remains +10.3¢ from year ago level. Consumption did edge up this past report.

Inventories were again mixed, with crude down -1.4M barrels; Distillates up +560K; Gasoline up +915K.

Refinery output continues to lag, compared to year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread has dropped from last week's $27.71, to $26.46. Gasoline at $16.43 from last week's $17.92. Distillates roset $10.03, compared to last week's $9.79.

It's hard to imagine any upward drift in gasoline pump prices on a national average basis. Consumption will need to pick up for prices to elevate above current levels. Even with reduction in gasoline production, the days supply is a bit high for early May. 

I am not complaining, but the question is why consumption is lower than last year? Some reasons might be good, but some might also be bad. 

A Foray into the 2024 Presidential Election, Part XV

Oh my!! After all the hoopla of the past week, I am not seeing any major shifts. 

Before starting, I have dropped Texas and Florida from the battleground states, most frequently visited in past elections. 

For Texas, in 2020, Trump generally led in the polls with a poll margin of 1.1%, just before the election. He won with a 5.57% margin. He currently leads in the polls with a 10.1% advantage, compared to same time in 2020... of 2.9%.

Florida polls this time in 2020, had Biden with a 2.2% lead, and a 2.5% lead just before the election. Trump won the state with 3.36% as the margin. Trump currently has a 10.3% lead over Biden.

I hope that answers the why.

Looking at the remaining battleground states for current polling and 2020 polling...

This time in 2020, saw Biden leading in all these states... except Georgia. The actual vote margins were much thinner than polls, everywhere except Minnesota and Virginia.

Fast forward to current, and Biden only leads in Minnesota and Virginia, with Minnesota being very tight, when adjusting for polling errors of past years.

So despite the hoopla, not much has really changed, except Pennsylvania has eased back into Trump territory.

Still a long way to go, but a look back to 2020 and/or 2016, does not look favorable for a dramatic shift, imho.

Until next time...

This Week in Petroleum Summary May 1st, 2024 per EIA.GOV

This week's full report.

Gasoline edged up 0.3¢ for the week, but also up 5.3¢ from year ago level. Consumption is below last week and year ago levels.

Inventories were mixed, but only due to distillates down 732K barrels. Crude was up 7.3M barrels, with gasoline up 344K barrels.

Refinery output continues to lag, against year ago levels.

For those interested, the exports of Crude, Petroleum Products, Including Gasoline has far outweighed the imports, by this much, since March, 2022.

The current crack spread has dropped from last week's $29.44, to $27.71. Gasoline at $17.92 from last week's $19.49. Distillates at $9.79, compared to last week's $9.95.

With recent developments over concern for demand... I would expect the pump prices to start falling. 

The big question is why the demand is slipping. I doubt it is due to pump prices, but rather constraints in other areas... limiting cash available at the pump. In any case, it is worth watching, as there are troubling signs.