Comparison of Inflation in selected countries- September, 2023 Edition

With the United Kingdom, Canada and EUstats release of August data, I have updated my comparison graph. [Note, the USA(EU method) is directly from Eurostat.]

The USA (CPI: +3.7%; +2.5% Eurostate method) and Canada +4.0%, ticked up for the 2nd consecutive month, with regards to year over year inflation. 

The EU has marked 10 consecutive months of decline in year over year inflation at 5.9%. That figure was down from 6.1% last month. It was not even across the board, as Germany's 6.5% of last month, dipped to 6.4%, which was improvement, but some countries... such as France increased from 5.1% to 5.7%, according to Eurostat.

The UK has now marked its 3rd consecutive decline at 6.3%, with the month over month at +0.4%, which was up from previous 2 months.

This Week in Petroleum Summary 9-20-2023, per EIA.GOV

Gasoline prices (per AAA) rose from last report's $3.848, to $3.875. One year ago the price had fallen to $3.674, but was at a low, before heading higher into Mid October's peak, then heading for the December low of $3.096.

Consumption edged down -1.8% from previous week and may be going into the fall season decline, even though the year over year is still up +2.9%. 

Data per the EIA weekly report. 

Crude stocks decreased -2.1M barrels, from last week, and is -3.9% below 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 -1.1% below that adjusted 5 year average.

Distillates inventory fell -2.9M barrels; and Gasoline inventories fell 831K barrels. Distillates (-11.5%,-3.1%) and Gasoline (-1.4%, -0.9%) are both below 5 year and 3 year adjusted average inventories.

The SPR increased another 600K barrels this past week. This is the 7th consecutive week for increases, which were the first since January, 2021.

WTI is $90.27, compared to $88.77 (+1.7%), one week ago, and $82.43 one year ago (+9.5%).

Refinery slipped on a weekly basis, but remains above year ago levels.

For anyone interested, the U.S. has exported 861M barrels of crude and petroleum products, more than imported, since March 1, 2022. That number increased by 16M barrels this past week. 

Gasoline exports/imports saw a net increase of 4.4M barrels this past week, with the tally since March 1, 2022, being 113M barrels being exported over imports.

Despite the draw on gasoline inventory, which was almost entirely a result of exports, the decrease in nationwide consumption indicates pump prices are at or near peak and some relief should follow.

Diesel prices are still leaning towards edging upward at this time. 

All of this is my opinion and yours may differ.

Natural Gas Summary, UK, EU, USA... Week Ending 9-15-2023

The Energy Information Administration released their weekly report.

The Pacific Region has pushed above year ago levels and is nearing the 5 year average.

EIA.GOV, via SNL Energy

Now for a look at The European Union and United Kingdom.

[The reason for this observation is LNG, which has introduced the prospect of U.S. Natural Gas prices being affected by global demand for LNG. The EU and UK serve as a benchmark for these demand issues.]

Data from the Aggregated Gas Storage Inventory report...

The overall EU pct. slipped since last week, but the volume in storage increased, as capacity increased.

While the EU as a whole, has approximately 100 days of supply, it should be noted that days supply varies greatly within the individual countries. 

Prices edged up in the EU and UK.

U.S. Henry Hub finished the week down -3¢.

Both TTF (Dutch) and UKG remain approximately double historical norms. Henry Hub is running about 2/3 of those norms. 

9-14-23, Advance Retail Sales Report for August Data

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

Advance estimates of U.S. retail and food services sales for August 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $697.6 billion, up 0.6 percent (±0.5 percent) from the previous month, and up 2.5 percent (±0.7 percent) above August 2022. Total sales for the June 2023 through August 2023 period were up 2.2 percent (±0.4 percent) from the same period a year ago. The June 2023 to July 2023 percent change was revised from up 0.7 percent (±0.5 percent) to up 0.5 percent (±0.2 percent).

Retail trade sales were up 0.6 percent (±0.5 percent) from July 2023, and up 1.6 percent (±0.5 percent) above last year. Gasoline stations were down 10.3 percent (±1.1 percent) from last year, while food services and drinking places were up 8.5 percent (±2.3 percent) from August 2022.

Again... "not for price changes", means not adjusted for inflation.

Much is being made of "gasoline's" impact, but the numbers, when adjusted for inflation continue to remain rather stagnant, with adjusted spending remaining rather flat since the roll out of the vaccines and that $1,400 stimulus in spring 2021. Which also coincides with the ramp up of inflation.

Last month, my mood was elevated, as previous month's data had been revised upward, after so many months of downward revisions. 

We seem to be at it again. Can I expect this month's numbers to be revised downward... next month? Revising a previous month downward, then claiming +0.6% increase, while then stating it is mostly gasoline, is befuddling to me. 

Somehow, I expect the cycle to continue, without anyone questioning those banner numbers. 

Producer Price Index September release with August 2023 Data

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

The Producer Price Index for final demand increased 0.7 percent in August, seasonally adjusted, after rising 0.4 percent in July, the U.S. Bureau of Labor Statistics reported today. (See table A.) The August advance is the largest increase in final demand prices since moving up 0.9 percent in June 2022. On an unadjusted basis, the index for final demand rose 1.6 percent for the 12 months ended in August.

In August, 80 percent of the rise in final demand prices is attributable to a 2.0-percent jump in the index for final demand goods. Prices for final demand services advanced 0.2 percent.

The index for final demand less foods, energy, and trade services increased 0.3 percent in August, the same as in July. For the 12 months ended in August, prices for final demand less foods, energy, and trade services rose 3.0 percent, the largest advance since moving up 3.4 percent for the 12 months ended in April.

So, the story is about gasoline prices creating most of the PPI. This might be true, but the current forecast is up and not down for that commodity.

Everything is screaming some future relief, except for what drove the August PPI higher. September is shaping up as a repeat of August, imho.

Not the most scientific metric, but there is more pink than last month. Not saying inflation is about to accelerate, but not so sure that crude oil will taper off its current rise. And we should remember that yesterday's CPI report mentioned the impact of gasoline, but also indicated that energy prices were down compared to one year ago... current at 294.328, year ago at 305.372. Gasoline current... 336.979, year ago at 348.593.

So, if last month's PPI was impacted by energy and thereby distorting the number, then energy being cheaper this year than last... would indicate the YoY 1.6% is also distorted. In fact the release indicates the PPI excluding energy was 2.0%. 

That is not a bad number, imho. Things are indeed looking up... except for pump prices, which are also looking up, but not in a good way.

This Week in Petroleum Summary 9-13-2023, per EIA.GOV

Gasoline prices (per AAA) rose from last report's $3.827, to $3.848. One year ago the price had fallen to $3.707, and was on its downward trajectory... into the early September lull, about $3.80. It rose a bit, then fell back to the December low of $3.096.

Consumption edged down a bit.

Data per the EIA weekly report. 

Crude stocks increased +4.0M barrels, from last week, and is -3.6% below 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 -0.4% below that adjusted 5 year average.

Distillates inventory rose +3.9M barrels; and Gasoline inventories rose +5.6M barrels. Distillates (-10.7%,-2.0%) and Gasoline (-1.0%, -0.3%) are both below 5 year and 3 year adjusted average inventories.

The SPR increased another 290K barrels this past week. This is the 6th straight week for increases, which were the first since January, 2021.

WTI is $88.77, compared to $86.70 (+2.4%), one week ago, and $87.36, one year ago (+1.7%).

Refinery slipped on a weekly basis, but remains above year ago levels.

For anyone interested, the U.S. has exported 845M barrels of crude and petroleum products, more than imported, since March 1, 2022. That number actually decreased by 3M barrels this past week. Likely due to the massive drop in crude exports, which may be attributed to when a ship leaves port. Look out next week.

Taking that into consideration... crude stocks may wane, compared to this time last year, with current days supply at 25.2, to last year's 26.7 days.

Gasoline exports/imports were about even this past week, with the tally since March 1, 2022, being 108.4M barrels being exported over imports.

Inventories are up across the board, with refineries purring right along. Pump prices should be falling, but they aren't. All those signs are pointing to $4 a gallon.

What am I missing?

BLS Data Dump. Real Earnings - September 13, 2023

The BLS has released the latest Real Earnings Report. 

Real average hourly earnings for all employees decreased 0.5 percent from July to August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.2 percent in average hourly earnings combined with an increase of 0.6 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 increase in the average workweek.  

Real average hourly earnings increased 0.5 percent, seasonally adjusted, from August 2022 to August 2023. The change in real average hourly earnings combined with a decrease of 0.3 percent in the average workweek resulted in a 0.3-percent increase in real average weekly earnings over this period.

The report was a bit of setback in earnings, as the hourly rate fell -5¢. It is up +2¢ somce February 2020.

Weekly earnings decline -38¢ from last month, although up +95¢ from February 2020.

The above charts include all categories of workers.

Now for the production and non supervisory...

This category saw a drop of -6¢ per hour, although still +15¢ above February 2020.

Weekly is a bit different...

2 consecutive months of decline, although not a trend at this point. Down -89¢ on the month, although still +$6.02 above February, 2020.

I do remember last month being hailed as proof of something. I forget what it was, but this month is also proof of something. Can't wait to hear the spin on this... if it even crops up in the news cycle.

That gasoline index, cited in August as being below last August... is true. Per AAA, the average for August 2022 was $3.97 and this year at $3.84. BUT, September of 2022 averaged $3.73 and thus far this month is $3.82 and current trading indicate today's national average of $3.85... is heading north of $4 very soon. 

I guess reviewing today's crude report is next on the agenda.