Real Earnings report, February Reports 2023

The BLS has released the latest Real Earnings Report.

All employees

Real average hourly earnings for all employees decreased 0.2 percent from December to January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from an increase of 0.3 percent in average hourly earnings combined with an increase of 0.5 percent in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings increased 0.7 percent over the month due to the change in real average hourly earnings combined with a 0.9-percent increase in the average workweek.  

Real average hourly earnings decreased 1.8 percent, seasonally adjusted, from January 2022 to January 2023. The change in real average hourly earnings combined with an increase of 0.3 percent in the average workweek resulted in a 1.5-percent decrease in real average weekly earnings over this period.

Treading water is the best way to describe the earnings report. The hourly rate is -3¢ lower than February 2020, with the weekly earnings at $2.45 more.

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I use February 2020, as the baseline. Everything thereafter was distorted by the type of jobs available, etc. 

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Real Earnings are adjusted for inflation. The question remains... what is the inflation outlook?

CPI DATA results, February Reports 2023

The BLS report was released this morning and it was a shade above consensus estimates. (historical releases)

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5 percent in January on a seasonally adjusted basis, after increasing 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 6.4 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase, accounting for nearly half of the monthly all items increase, with the indexes for food, gasoline, and natural gas also contributing. The food index increased 0.5 percent over the month with the food at home index rising 0.4 percent. The energy index increased 2.0 percent over the month as all major energy component indexes rose over the month.

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It would seem the food at home index is getting a lot of attention. The concept that things are really getting better in this area. 

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Aside from the dip in November, the prices have been increasing. Of course, that didn't prevent one wag from looking at the wrong line on the report and coming up with something called a 3 month average, annualized, as proof that things are trending downward. 

Except, the downward trend, sharply ended a couple of months ago, and is now on the rise. Using the correct line from the report, yields this...

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So yes, this method does indicate a number below the y/y, but is now indicating 2 consecutive months of upward movement. The M/M unadjusted was +0.8%, or annualized to 9.6%. Not far from the y/y rate of 10.1%.

I get the distinct impression the CPI coming up above expectations, is being rationalized with but, but, but arguments.

Not sure how these arguments can hold up, but we Americans are easily manipulated. Actually, people around the globe are much the same.

Cooking With Natural Gas Feb 9 2023

The Energy Information Administration released their weekly report Thursday.

Natural Gas storage is still within 5 year range for the USA.

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There was quite a drop in this last reporting period, but still remains in good shape on the 5 year scale.

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As for pricing, the Northeast and West Coast saw significant drops in prices, as outlined in the report. Generally speaking, the prices in the USA fell back to seasonal norms of 2 years ago. 

The situation in Europe has seen prices fall dramatically, but still quite elevated... compared to 2 years ago. 

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In any event, the winter has been mostly mild and translated into less than expected drawdowns. HOWEVER, no one can forecast next winter's weather, so expect some upward movement in Natural Gas prices... come mid summer. 

Gasoline consumption through week of 2-03-2023

Gasoline prices were (per AAA) were down 5.6¢ this week, to $3.445. A year ago, the price was $3.49.

Not sure how long this will last, although inventories are up and refinery output did slightly increase.

The however... is right on cue, as the seasonal consumption is edging up. (This is a four week moving average). It is -1.3% below one year ago levels. 

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st, stands at 88.8M barrels. If you saw last week's report, that is down 300K barrels. Somehow, I doubt that continues, although economic conditions might keep it downward in trajectory.

My completely ignorant prediction is... pump prices will be lower by this time next week. I won't go any further. 

Gasoline, Crude and Distillate Inventories - FEB-08-23

 Today's EIA.gov report. 

Crude stocks went up +2.4M barrels, from last week; Distillates up 2.9M Barrels; and Gasoline up 5M barrels. 

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WTI at $78.46, compared to $77.20, one week ago, and $87.90 a year ago. 

Refinery output slightly increased on this report, but still below one year ago levels. 

For anyone interested, the U.S. has exported 465.3M barrels of crude and petroleum products, more than imported, since March 1, 2022. This week's report marks two consecutive weeks with net deficit of import/export. 6.1M barrels to be precise.

Overall, crude stocks are quite healthy, compared to this time last year (4th highest), also being in the upper 5 year range and the highest since June 2021.

So what could go wrong?

Gasoline consumption through week of 1-27-2023

Gasoline prices were (per AAA) were up 2¢ this week, to $3.50. A year ago, the price was $3.38. There was a bit of good news, as prices seem to have plateaued. 

Not sure how long that will last, although inventories are up and refinery output did slightly increase.

The however... is right on cue, as the seasonal consumption is edging up. (This is a four week moving average).

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If you are really into this type of thing... the import/export surplus of gasoline since last March 1st, stands at 89.1M barrels. 3M of those barrels coming in the week leading up to this report. 

Gasoline, Crude and Distillate Inventories - FEB-1-23

Today's EIA.gov report. 

Crude stocks went up +4.1M barrels, from last week; Distillates up 2.3M Barrels; and Gasoline up 2.5M barrels. 

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WTI at $76.98, compared to $80.15, one week ago, and $86.69 a year ago. 

Refinery output slightly increased on this report, but still below one year ago levels. 

For anyone interested, the U.S. has exported 471M barrels of crude and petroleum products, more than imported, since March 1, 2022. Oddly, this week's report was the first since then to show a slight import/export deficit. -238K to be precise.