Incomplete Data and Hyperbole!!

The BEA released the Personal Income and Outlays, October 2022, this morning..

I have highlighted the adjustments from last month's release. 

You can scroll down on each month's release to examine the adjustments. It is not uncommon to have these revisions, as they are estimates and with the arrival of more data, the estimates can be further refined. Sometimes, this can result in adjustments going back a few month, as indicated by the numbers underlined in red.

In other words... the estimate is based on incomplete data. What astounds me, is the hyperbole surrounding this single report, or any other, as some signal from God... that some FED reversal is imminent. 6.0% is triple a target of 2.0%. At least it used to be, in the days before FTX.

Yes, I understand the one month PCE ex F&E was 2.7% annualized. This past July, saw that figure at 0.8% annualized. So hush! The FED probably uses a lot of data points, as well as one of those magic eight balls.

Overall inflation rates are improving across the board and it is not impossible that a more normal rate of inflation could be upon us by next summer, based on current progression. However, is that due to recessionary pressures, Federal Reserve actions, global intrigue... or any combination? 

I dunno!

Crude, Distillate, and Gasoline Inventories - Nov. 30th 2022

Another weekly EIA report.

In a nutshell, Crude stocks fell -12.5M barrels; Distillates increased +3.5M Barrels; and Gasoline increased +2.7M barrels.

Gasoline consumption is slowing and after a slight rise a few weeks back... is resuming the downward trend. The price at the pump is also falling, although exports are keeping the prices from falling any faster. (See above chart for gasoline imports/exports) 

I have been reading reports of the national average falling below $3 by Christmas. I can see an average of $3.15, but any more is doubtful, imo. 

On the other hand, some hysteria over more potential OPEC+ cuts, a sudden drop in the dollar, and whatever the EU is about to do... will cause big problems in the energy market. Yet the futures seems to be holding steady. 

My guess is hysterical headlines make for great click bait. 

Quick Take on GDP Revision

 The BEA release.

Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the third quarter of 2022 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.6 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month.  In the advance estimate, the increase in real GDP was 2.6 percent. The second estimate primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased more than previously estimated (refer to "Updates to GDP").

That is good news, except when delving into the details, although still not so bad... just not so optimistic going forward. 

              

Considering the size of PCE relative to overall GDP, the increase is more a product of overstating the advance GDP's drop in that category. Which is a good sign, if PCE is easing back into the traditional range and all the other categories begin pulling their weight.

It should be noted, however, that consumer spending has increasingly become a greater share of the GDP. How long can that continue?

 

Diesel and Gasoline, Nov. 23, 2022

 Another round of data from the EIA.gov...

Crude Inventories slipped -3.7M barrels, with distillates up +1.7M barrels and gasoline up +3.0M barrels. Prices did slip in all categories the past week.

Consumption slipped as well, after moving up two weeks straight.

Even distillate stocks edged up in all areas, except the left, er... west coast.

A lot seems to be hinging on December the 5th, and price caps. Not sure how that will work, or if it will work. It seems, it was telegraphed too far in advance and the opponent has been preparing a counter.

There is still 390.5M barrels of crude in the SPR, down -257.6M barrels from two years ago, or -39.7%. 

Of course, how much of that 390.5M barrels remaining is usable... is not fully known. It is stored in salt caverns and there will be some spoilage. 

I Voted, But My Rationale Was Probably Different Than Yours

I have long considered the likelihood of media manipulation of the 2016 election. I don't think there was vote fraud, or at least to the extent to alter the election results for 2016 or 2020. I should explain myself. 

I was somewhat puzzled in early 2016, when the center left of the mainstream media, really amped up the noise around a Trump campaign. Afterall, it was a "joke" campaign. However, that "joke" campaign started to erode the legitimacy of more convention Republican candidates, which would be of benefit to those same center left media companies, specifically those... well left of center organizations.

This managed to propel Trump into the republican nomination, which was certain to end in defeat to Clinton. They were so certain of a Clinton victory, it was deemed necessary to show some "balance" by promoting news, that was harmful to Clinton. This was all okay, as Clinton could not conceivably lose.

Yep, there were some shocked people in those newsrooms. It was important to rectify their mistakes by immediately pointing fingers at everyone else. That continued through the 2020 campaign, and finally Trump was ousted. Not by much, as a few thousand votes in certain states could have given Trump victory, just like a swing of a few thousand votes in 2016, would have given Clinton victory.

It is very clear that Trump was a drag on what should have been a victory dance in 2022, for the republicans. The democrats need Trump running loose, to be able to win in 2024. If you cannot see this trap, then you are blind. Basically, Trump needs to sit down and hush, for the republicans to have a shot in 2024.

The democrats need Trump to be front and center, for them to feel good about 2024. That's why I voted to keep Trump banned on twitter. 

Every time Trump tweets, the lamestream media will pounce on it, rebroadcast it, make political hay of it... just to keep Trump in the minds of voters, even ones that are trying to forget him.

Then there is the curious case of Biden. Democrats do not need Biden in 2024. That he was the best the democrats could do in 2020, is a testament to their horrid track record of developing worthwhile candidates. Lest we forget... the republicans gave us Trump. We have to be nearing rock bottom for choices to be between Biden and Trump.

It is time to turn it over to younger people of both parties. Let's start with... say less than 75!!!😎

Is There a Natural Gas Shortage In the US?

Not if today's report from EIA.GOV is any indication.

Current natural gas in underground storage, matches last year's figure. Of course, the regional differences might an issue.

While it might look good, it should be noted that storage is not sufficient to last through the winter for the East, and especially the Northeast. Pipeline constrictions limit the resupply, which results in requiring LNG. The latter is a political hot potato. Be wary of which side of any argument you might feel inclined to side with. 

Each side has an agenda and while we want to focus on the truth... sometimes the truth is not the whole truth. 

An example of how facts and truths can be spun. 

• The earth was 94.5 Million miles from the sun in July.
• The earth will be 91.4 Million miles from the sun this coming January.

Both of those statements are true and factual. Taking those two statements alone, could result in some wild claims about the earth crashing into the sun in less than 15 years, which is not true or factual. 

The point being... there is a lot more truth to be uncovered, to find the whole truth, and nothing but the truth. So be wary of some of those truths being bandied about.

Okay, on to natural gas futures...

One thing is for certain... consumer costs for heating will go up this winter. Energy inflation is still a thing, even if gasoline prices are slipping. 

Diesel and Gasoline, Nov. 16, 2022

Another week, another data dump from EIA.Gov.

Crude inventory slipped -5.4M barrels; Distillates up +1.1M barrels; Gasoline up +2.2M barrels. Prices for barrels of WTI, slid -3.65; Highway diesel eased -2¢ per gallon; residential heating oil was down -10.8¢ per gallon; and gasoline was down -3.4¢ per gallon. 

Gasoline consumption, seems to be heading up and possibly moving above the 3 month moving average at current pace. Why it is happening, is beyond my scope of knowledge, although the retail numbers from today, seem to support an increase in gasoline consumption. Maybe with cold weather, people are warming up their cars, before driving.

Diesel seem to still be an issue, as inventories remain low, especially in the Northeast.

I would suggest that areas other than the northeast, may slowly build, as agricultural usage should begin to ease with the bulk of crops being harvested. It should be noted the dry weather in many of these areas have accelerated harvest and the need for drying the crops down has been reduced. 

Not sure that is the reason for propane stocks rising, but works for me, as inventory is well above this time last year.

I did add politics as a tag, but I won't say anything until this election is finally over. Does anyone know when that will be. 😎