This Week in Petroleum Summary 12-6-2023, per EIA.GOV

Just some charts to summarize today's report...

Prices continue to fall and could challenge the December 23rd, 2022 low of $3.096... In fact it is more than possible, imho.

That's a wrap!

A Further Review of 3rd Quarter, 2023 GDP... just for fun!!

So yes, the GDP was revised to 5.2% annualized, from 4.9% annualized. That does not mean the economy is robust. It's not bad, but robust is a bit of hype for politicians.

The BEA moved from 2012 dollars to 2017 dollars for the 3rd quarter releases and going forward, until next change in... say 5 years.

In theory, it should have been even across the board, after compensating for 5 years of dollar value adjustments, etc. Such as inflation being about 7.5% during that 5 year period.

If only there was someone, somewhere that downloads those excel spreadsheets from each GDP iteration.

Voila...

Note the column headings for 2012 dollars and 2017 dollars AND the % Change. The changes were clearly not uniform across the various groupings.

While there was a 9% upward adjustment, several groupings failed to match that rise, including some that went negative... while others outpaced the 9% reading.

So in theory, all the numbers going back in time were revised to reflect the current situation. But again, that was very uneven. Just consider the trade deficit, which is a drag on GDP... and those changes.

All in all, it did distort the 3rd quarter readings and possibly provided a misleading annualized number. That would be no big deal... if not for an election year and people willing to make everything political. 

While the current 5.2% annualized is being hailed as something significant, I wonder what will be hailed, when the 4th Qtr. 2023 is revealed on January 25th, 2024. My guess is way below that 5.2%. Back to the 2.0% annualized, or even lower!  

One can imagine the hysteria over such falling numbers, but the adjustment was improperly attributed to a "robust" economy.

So remember... the trade deficit, which is a drag on GDP was revised dramatically lower, after the BIG change for 2012 to 2017 dollars. That trade deficit adjustment was about 100% of that 5.2% annualized, or ±0.1% annualized without that lone adjustment.

You think I might be off my rocker! The current Real GDP rolls in at 22,506.4B, which is a hefty 281B above the 2nd qtr. figure of  22,225.4B. Now take a look at that downward revision of the trade deficit,  -284B. 

Remember the trade deficit is a drag on GDP, so a downward revision in the Trade deficit would result in a higher GDP print. IF the GDP had not been revised downward by -284B, then that +281B gain in GDP would evaporate. As in +0.1% annualized.

Oh well! It is just numbers and you can believe what you want. However... that adjustment was one time only, for the time being and 4Q23 will be significantly lower, imho. How does a drop off from +5.2% annualized to say +1.7% annualized look in an election year. 

One group will claim the economy is crashing into a recession, another group will be saying soft landing is working, and another group will be screaming the FED must cut rates rapidly.

I then ask you, if stating the 3Q23 was actually 0.1% and the 4Q24 was +1.7%, would indeed indicate a possible soft landing. Of course, the groups would likely being crying the same thing... just 3 months earlier.

It is fun to watch all the spin!

A Foray into the 2024 Presidential Election, Part Four

Here I go again, delving into the rabbit hole of politics and polls.

The polls are wrong, as we all know. 

In 2016, Clinton was leading Trump in Wisconsin by 5 points, yet lost the state.

In 2020, Biden turned it around and led by 9 points in the polls, yet barely won the state by 20,000 votes or 0.6%

Granted Clinton only had a 2 point lead in Michigan, ahead of the election and lost by a slim margin. Once Again, Biden turned it around by having a 9 point margin, before finishing 2.8% ahead.

In 2016 Clinton had a 2 point lead in Pennsylvania, before losing that state. Again Bided turned it around with a 5 point lead, and winning by a slim 1.2%. A win is a win.

Florida was a deadlock and then the election of 2016 had Trump up by a slim 0.8%. Biden had a 3 point lead in Florida for 2020, yet Trump won by 3.3%.

Again in 2020, Biden had a 1 point lead in Texas, and it was widely assumed Texas was turning blue, except Trump won by 5.5%. It was tighter than 2016, so maybe turning blue, but not just yet.

Of course some states matched the poll numbers, such as Georgia. Almost nailed it in 2016 and 2020. 

Arizona was near that match for both years, as was Nevada and some others.

I suppose there are many reasons, such as 3rd party candidates, undecided voters, no shows, etc.

So having gone down the rabbit hole of reviewing the 2016 AND 2020 polls by state... I have come up with my own darn formula.

Yes, you saw that right. Trump has an edge at this point in time. Biden needs to focus on the slights and get them back in the fold...

Amazing that Minnesota is in the mix, but the indications are there. Then there are the marginals for Trump...

Biden needs to swing 27 Evs back from these. Any two will do, So along with Arizona, Minnesota and Nevada... 2 more.

Remember Arizona and Nevada seem to match polls with election results. So does Georgia.

Not that a swing back couldn't be accomplished, but most of these states have polled poorly for democrats, when compared to general election.

That took up way too much of my time, so that's it for now.

My Analysis Methods Regarding CPI and Weightings.

I was prompted recently, by the uproar of the inflation data and CPI "hiding" information. I think the information is there, but a lot of folks don't bother to read past the headline.

An example would be the food component.

To understand my recent research, understand an article was written by a mainstream media source that stated... the typical American family must spend $11,400 more now on the basics, compared to January of 2021. They cited the BLS data.

So the January 2021 BLS report, had the print at 261.582. The October 2023 BLS report, rolled in at 307.671. Overall, it shows inflation rose 17.619%, during that period.

If that family is spending $11.4K more, then they were spending at an annual rate of $64,700, in January 2021, compared to a current rate of $76,100. A difference of $11.4K or 17.619%.

This is the basic CPI print for food total, food at home, and food away from home...

Now that those conditions are understood... onto the weightings.

This is what happens, when the weightings are thrown into the mix...

Note that food overall is much less at 11.4%, than the first chart's 20.2%. However, food at home jumps to 29.4% from the former chart's 20.9%. Oddly, the actual food away from home spending has fallen -10.7% since January 2021.

We are spending much more on food at home, than the BLS numbers indicate. It is due to fluctuations in weightings. These fluctuations are found in almost, if not all... categories.

 

Review of October 2023 data, GDP, PCE and personal income

Just some charts with a bit of commentary...

The headlines proclaimed a resilient consumer propelled the advance estimate of 4.9% annualized... to 5.2%. Seriously, the PCE slipped from 4.0% to 3.6%. You could toss in Residential investment, but you still come up lacking. 

It was a good report, but could have done without the spin, imho.

A couple of charts about PCE. Adjustments are in red. Again, a good report.

And to finish up the charts...

October ended up being an all around good month. May it continue.

This Week in Petroleum Summary 11-29-2023, per EIA.GOV

Just some charts to summarize today's report...

Gasoline prices have continued to fall, BUT seem to be nearing an end, imho.

Overall, the inventory numbers gained across the board, including the SPR. 

Consumption of Gasoline is slipping, but still slightly above year ago levels. 

The drop in gasoline prices should drop the CPI to -0.3% month to month and +3.0% on the year. It is a seasonal thing.

A Foray into the 2024 Presidential Election, Part Three

In part two, I did a quick peak at current polls, based on just D v R.

Part 3 adds independents, etc., into the mix, although impact is just D and R...

Certainly, my methodology is not very scientific, but it would appear the Kennedy factor is actually harming Trump, more than Biden, although both trend lower with the inclusion of Kennedy.

At this point, Kennedy does not appear anywhere near getting even 1 electoral vote, but the potential to drag voters away from either major party's candidate is possible. However, as stated previously, the impact appears more on the Republican side, rather than the Democrat side. Most notably in Arizona, North Caroline, and Pennsylvania.

The one thing about polls, is people do tend to wish for one thing during poll season, but will vote their party at election time, if republican or democrat. 

Independents might switch back and forth, but generally vote for which major party candidate makes them feel better, or rather... less worse.