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.

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?