Tuesday , November 13 2018
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2nd Quarter GDP Up 4.1% Despite Largest Inventory Contraction Since 2009

July 29, 2018

The Advance Estimate of 2nd Quarter GDP from the Bureau of Economic Analysis released on Friday included changes in definitions, in classifications, and in the presentation of the components of GDP, as well as an annual and a comprehensive (or benchmark) revision of the national income and product accounts going back to 1929, ie, from the beginning of that measure of our economic history.  Also with this benchmark revision, the reference year for the chain-type quantity and price indexes and for chained-dollar estimates of the GDP components has been updated to 2012 from 2009, which means that the quantity of goods and services produced in the US will now be represented by chained 2012 dollars, at least until the next benchmark revision, which is expected to be five years hence.  Despite

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Construction contribution to Q1 GDP under-reported by 47 basis points, despite 1.7% drop in March

May 8, 2018

Construction spending fell 1.7% in March, after construction spending for both January and February were revised much higher.  The Census Bureau’s report on construction spending for March (pdf) estimated that the month’s seasonally adjusted construction spending would work out to $1,284.7 billion annually if extrapolated over an entire year, which was 1.7 percent (±0.8%) below the revised annualized February estimate of $1,306.4 billion, but 3.6 percent (±1.3 percent) above the estimated annualized level of construction spending in March of last year. However, the annualized February construction spending estimate was revised 2.6% higher, from $1,273.1 billion to $1,306.4 billion, while the annual rate of construction spending for January was revised 1.7% higher, from $1,272.2 billion to

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OPEC’s February Oil Market Report showed that the global oil glut is growing again

February 26, 2018

Since the media largely missed what the data from OPEC’s February Oil Market Report (covering January OPEC & global oil data) actually showed, and since Saudi jawboning about oil supply and demand in advance of the Aramco IPO has been keyed to keeping oil prices higher, we’ll take a quick look at that report, which is available as a free download.  The first table from this report that we’ll look at is from page 69 of that OPEC pdf, and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate.  For all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies

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December Trade Deficit Up 5.3% on Higher Imports of Cellphones, Drugs and Cars

February 13, 2018

Our trade deficit was 5.3% higher in December as the value of both our exports and our imports increased, but our imports increased by more. The Commerce Department report on our international trade in goods and services for December indicated that our seasonally adjusted goods and services trade deficit rose by $2.7 billion to $53.1 billion in December from a revised November deficit of $50.4 billion. The value of our December exports rose by $3.5 billion to $203.4 billion on a $3.4 billion increase to $137.5 billion in our exports of goods and a $0.1 billion increase to $65.9 billion in our exports of services, while the value of our imports rose $6.2 billion to $256.5 billion on a $6.0 billion increase to $210.8 billion in our imports of goods, and a $0.3 billion increase to $45.7

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One cold snap uses 11.5% of US natural gas supplies; 8 more weeks like that and our gas storage will be totally empty

January 15, 2018

The cold week that we saw at the beginning of this month set quite an stunning record for US natural gas supplies, and put an exclamation point on our concerns about the natural gas that we’re exporting.  In the first week of the new year, or more specifically over the week that ended on January 5th, the demand for natural gas was so great that we had to use nearly eleven and a half percent of all the natural gas that was in storage in the US, in addition to everything that was produced by US wells during the week, to meet the needs of heating, industry, power generation, and contracted exports.  As you know, on Thursday of every week (except on holidays), the EIA publishes the Weekly Natural Gas Storage Report, which reports on the amount of natural gas in storage in each of the 5 energy

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November Personal Spending Up 0.6%, Two Months PCE Adds 171 Basis Points to Q4 GDP

December 26, 2017

The November report on Personal Income and Outlays from the Bureau of Economic Analysis includes the month’s data for our personal consumption expenditures (PCE), which accounts for more than 69% of the month’s GDP, and with it the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated.  In addition, this release also reports our personal income data, disposable personal income, which is income after taxes, and our monthly savings rate.  Because this report feeds in to GDP and other national accounts data, the dollar value change reported for each of those metrics is not the current monthly change; rather, they’re all seasonally

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Consumer Prices Rose 0.4% in November on Higher Energy Costs

December 20, 2017

The consumer price index increased by 0.4% in November, as higher prices for energy were only slightly offset by lower prices for groceries and clothing.  The Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the seasonally adjusted price index rose 0.4% in November after it had risen 0.1% in October, 0.5% in September, 0.4% in August, 0.1% in July, and after it was unchanged in June and had fallen 0.1% in May. The unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, inched up from 246.663 in October to 246.669 in November, which left it statistically 2.203% higher than the 241.353 index reading of last November, which is reported as a 2.2% year over year increase. With an increase in energy prices accounting for three-fourths

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OPEC oil output at a 6 month low; global oil output at a 12 month high

December 18, 2017

We’re going to start by reviewing OPEC’s December Oil Market Report (covering November OPEC & global oil data), which was released on Wednesday of last week, and which is now available as a free download.  The first table from this report that we’ll look at is from page 64 of that OPEC pdf, and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate.  For all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry

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October Trade Deficit Up 8.6%, Revisions Whack 3rd Quarter GDP

December 12, 2017

Our trade deficit rose by 8.6% in October as the value of our exports slipped a bit while the value of our imports increased.  The Census report on our international trade in goods and services for October indicated that our seasonally adjusted goods and services trade deficit rose by $3.8 billion to $48.7 billion in October from a revised September deficit of $44.9 billion.   The value of our October exports fell by less than $0.1 billion to $195.9 billion on a $0.3 billion decrease to $130.3 billion in our exports of goods and a $0.3 billion increase to $65.6 billion in our exports of services, while our imports rose $3.8 billion to $244.6 billion on a $3.5 billion increase to $199.4 billion in our imports of goods and a $0.3 billion increase to $45.2 billion in our imports of

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Producer Prices Rose 0.4% in October on Higher Gas Station Margins and Wholesale Drug Prices

November 20, 2017

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.4% in October, as prices for finished wholesale goods increased 0.3%, while margins of final services providers increased by 0.5%.  This followed a September report that indicated the overall PPI had increased by 0.4%, as prices for finished wholesale goods increased 0.7%, while margins of final services providers increased by 0.4%, and an August report that indicated the PPI was up 0.2%, with prices for finished wholesale goods up 0.5%, and margins of final services providers up 0.1%.  Excluding food, energy and trade services, core producer prices were up 0.2% in October, after also rising 0.2% in both August and September.  On an unadjusted basis, producer prices are now 2.8% higher than a year earlier, the

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Advance Estimate of 2nd Quarter GDP & Revisions From 2014 to Present

July 31, 2017

The Advance Estimate of 2nd Quarter GDP from the Bureau of Economic Analysis released on Friday included an annual revision to the past 3 years of GDP releases, revising previously published data from the first quarter of 2014 through the first quarter of 2017, which on net indicated that US economic growth over the period from 2014 to 2016 was at a 2.3% annual rate, revised from the 2.2% composite annual growth previously published for that period of the current expansion.  In addition to the recent quarters of 2017, this report also showed that the GDP growth rate for 2014 was revised from 2.4% to 2.6%; that the growth rate for 2015 was revised from 2.6% to 2.9%, and that the GDP growth rate for 2016 was revised from 1.6% to 1.5%.
The first quarter of 2017, which had been revised up to a

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The Great US Natural Gas Exports Myth

July 10, 2017

Mr Trump was in Europe last week for the annual meeting of the G-20, the heads of government for the world’s 20 largest economies.  Part of Trump’s agenda on that trip was to promote exports of US natural gas in Europe, with the apparent intention of undermining Russian dominance of natural gas markets on the continent.  The groundwork for this natural gas scheme was laid in late June, when the US Senate voted 98 to 2 to impose further sanctions on Russia, with the intention of waylaying the construction of the Nord-Stream 2, a subsea natural gas pipeline planned from Russia to Germany, which international energy firms are involved in.  To an extent, the Europeans went along with that scheme, extending their own energy sanctions against Russia to January 31st, 2018.  Nonetheless, I found

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May Personal Income up 0.4%, Spending up 0.1%; 2 Months PCE to Add 184 Basis Points to Q2 GDP

July 3, 2017

The May report on Personal Income and Outlays, released on Friday by the Bureau of Economic Analysis, gives us nearly half the data that will go into 2nd quarter GDP, since it gives us 2 months of data on our personal consumption expenditures (PCE), which accounts for more than 69% of GDP, and the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated.  This same report also gives us monthly personal income data, disposable personal income, which is income after taxes, and our monthly savings rate.  However, because this report feeds in to GDP and other national accounts data, the change reported for each of those are not the

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OPEC cuts still not reducing global oil glut, and they know it

May 15, 2017

Both oil and natural gas prices moved higher last week, as both commodities saw larger than expected withdrawals of supplies from storage, while oil prices were also underpinned by expectations that OPEC would extend their production cuts when they meet in Vienna later this month.    An expression of confidence in that extension from Saudi energy minister Khalid al-Falih on Monday buttressed the rebound from last week’s crash, as oil rose 21 cents to close at $46.43 a barrel.  Prices then moved lower on Tuesday, closing at $45.88 a barrel, after the EIA raised its forecast on domestic crude output for this year and next, and cut its 2017 price outlook.  However, when the weekly EIA report showed the largest crude oil inventory draw since December, oil prices surged as much as 4% before

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4th Quarter GDP Revised to Show Growth at a 2.1% Rate

April 4, 2017

The Third Estimate of our 4th Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 2.1% rate in the 4th quarter, revised from the 1.9% growth rate indicated by the second estimate reported last month, as personal consumption expenditures and inventory investment were greater than was previously estimated, while losses from trade were worse than was previously estimated.  In current dollars, our fourth quarter GDP grew at a 4.2% annual rate, increasing from what would work out to be a $18,675.3 billion a year output rate in the 3rd quarter to a $18,869.4 billion annual rate in the 4th quarter, with the headline 2.1% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 2.1%, also known as the GDP deflator, was applied to the current dollar change.

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Half million barrel per day global oil surplus persisted in February

March 21, 2017

Since oil pricing, and hence the industry’s plans for new oil field exploitation in the US, is still largely dependent on what OPEC does, we’ll start by looking at the new OPEC Monthly Oil Market Report for March, which covers February OPEC & global data.  The first table we’ll include here is from page 60 of that OPEC pdf and it shows oil production in thousands of barrels per day for each of the OPEC members over the recent years, quarters and months, just as the column headings are labeled. For all their official production measurements, OPEC uses "secondary sources", such as analyst’s reports from satellites and shipping data, as an impartial adjudicator as to whether their output quotas and production cuts are being met, to resolve any potential disputes that could arise if each member reported their own figures.  This is also the oil production data we often see quoted in the media, other than that from independent analysis by energy research divisions of organizations such as Platts and Reuters, who will compute & use their own numbers..

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Trade Deficit, Up 9.6% in January, on Track to Clip 78 Basis Points from Q1 GDP

March 14, 2017

Our trade deficit rose by 9.6% January, as the value of both our exports and our imports increased, but our imports increased by much more. The Census report on our international trade in goods and services for January indicated that our seasonally adjusted goods and services trade deficit rose by $4.2 billion to $48.5 billion in January, the highest in 5 years, from a December deficit which was revised but statistically unchanged at $44.3 billion. The value of our January exports rose by $1.1 billion to $192.1 billion on a $1.1 billion increase to $128.0 billion in our exports of goods and a decrease of less than $0.1 billion to $61.1 billion in our exports of services, while our imports rose $5.3 billion to $240.6 billion on a $5.1 billion increase to $197.6 billion in our imports of goods and a $0.2 billion increase to $42.9 billion in our imports of services.   Export prices averaged 0.2% higher in January, so the real growth in exports was less than the nominal dollar value by that percentage, while import prices were 0.6% higher, meaning real imports were smaller than the nominal dollar values reported here by that percentage.
The increase in our January exports of goods was mostly a result of higher exports of industrial supplies and of automotive products, offset by a decrease in our exports of capital goods.

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4th Quarter GDP Growth Remains at a 1.9% Rate

March 6, 2017

The Second Estimate of our 4th Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 1.9% rate in the 4th quarter, unrevised from the advance estimate reported last month, as personal consumption expenditures were greater than initially estimated, but both private and state and local investment grew less than was first estimated.  In current dollars, our fourth quarter GDP grew at a 3.9% annual rate, increasing from what would work out to be a $18,675.3 billion a year output rate in the 3rd quarter to a $18,855.5 billion annual rate in the 4th quarter, with the headline 1.9% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 2.0%, aka the GDP deflator, was applied to the current dollar change.
While we cover the details below, remember that the press release for the GDP reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a change a bit over 4 times of that which actually occurred over the 3 month period, and that they only use the prefix "real" to indicate that the change has been adjusted for inflation using prices chained from 2009, and then calculate all percentage changes in this report from those artificial 2009 dollar figures, which we think would be better thought of as representing quantity indexes.

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Despite OPEC Cuts, Global Glut Grows A Million Barrels a Day

February 21, 2017

Last week saw the release of the OPEC Monthly Oil Market Report for February (pdf), which covers global oil data for January.  It’s the production data in that report, not the IEA estimates that we looked at last week, that will determine, by OPEC’s own standards, whether their members have complied with the production cuts they have agreed to or not.  This first table we’ll look at is from page 59 of the OPEC pdf and it shows oil production in thousands of barrels per day for each of the OPEC members over the recent years, quarters and months as the column headings are labeled.  For all their official production measurements, OPEC uses "secondary sources", such as analyst’s reports derived from satellite and shipping data, as an impartial adjudicator of their output quotas and production cuts, to resolve any potential disputes that might arise if each member reported their own figures.  This is also the data we typically see quoted in the media, other than in independent analysis by energy research divisions of organizations such as Platts and Reuters that will publish their own numbers.

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New Record Highs for US Oil Exports, for Gasoline Inventories, and for Oil Inventories

February 20, 2017

This week’s oil data for the week ending February 10th from the US Energy Information Administration showed that our imports of crude oil fell back from last week’s 4 year high but still remained elevated, while our refining of that oil fell for the 5th week in a row to the second lowest rate in a year, and as a result there was another large surplus of crude that was added to our oil supplies, which were thus boosted to an all time high.  Our imports of crude oil fell by an average of 881,000 barrels per day to an average of 8,491,000 barrels per day during the week, while at the same time our exports of crude oil rose by 459,000 barrels per day to an average of 1,026,000 barrels per day, which meant that our effective imports netted out to 7,465,000 barrels per day for the week, 1,340,000 barrels per day less than last week.  At the same time, our crude oil production slipped by 1,000 barrels per day to an average of 8,977,000 barrels per day, which means which means that our daily supply of oil, from net imports and from wells, totaled an average of 16,442,000 barrels per day during the week.
At the same time, refineries reportedly used 15,458,000 barrels of crude per day during the week, 435,000 barrels per day less than during the prior week, while at the same time, 1,361,000 barrels of oil per day were being added to oil storage facilities in the US.

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OPEC cuts their oil output but keeps on drilling

February 13, 2017

Oil continued to trade in a narrow range last week as news that OPEC had achieved 90% compliance to their agreed to production cuts offset the news that US oil supplies saw their 2nd largest weekly jump in the EIA’s records.   Strength in U.S. dollar, which makes internationally traded commodities cheaper, weighed on oil prices to start off the week, as US WTI oil for March delivery fell 1.5% to close at $53.01 a barrel, after closing the prior week at $53.83.  Prices continued to fall on Tuesday, after the EIA forecast that US crude output would hit a fracking era high in 2018 and the American Petroleum Institute reported the 2nd largest increase in oil inventories in history, along with large increases in gasoline and distillate supplies, and again ended another 1.5% lower at $52.17 a barrel.   However, prices steadied on Wednesday, despite confirmation of the large oil supply increase from the EIA, and closed up 17 cents at $52.34 a barrel, as a drop in gasoline supplies encouraged traders to think that demand for gas was returning to normal.  Momentum from that rebound carried into Thursday, when prices rose to close at $53.00, after oil ministers from Iran and Qatar suggested that OPEC production cuts might be extended into the 2nd half of this year.  Oil prices then rose 1.6% on Friday to close out the week 3 cents higher than last week at $53.

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Using December CPI to compute real PCE shows a 138 basis point boost to 4th qtr GDP

January 23, 2017

The consumer price index increased by 0.3% in December, as higher prices for fuel and housing were only slightly offset by lower prices for groceries. The Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the seasonally adjusted price index for urban consumers rose 0.3% in December after it had risen 0.2% in November, 0.4% in October, 0.3% in September, and 0.2% in August.  The unadjusted CPI-U, which was set with prices of the 1982 to 1984 period equal to 100, rose to 241.432 in December from 241.353 in November, which left it statistically 2.075% higher than the 236.525 index reading of last December, which is reported as a 2.1% YoY increase.  Regionally, prices for urban consumers have risen by 2.5% in the West, by 2.0% in the South, 1.9% in the Northeast and by 1.8% in the Midwest over the past year, with generally greater price increases within regions in cities of more than 1,500,000 people.  With higher prices for gasoline partially responsible for the increase in the index, seasonally adjusted core prices, which exclude food and energy, rose by 0.2% for the month, with the unadjusted core index rising from 249.227 to 249.134, which left it 2.197% ahead of its year ago reading of 243.779…
The volatile seasonally adjusted energy price index increased by 1.5% in December, after it had risen by 1.2% in November, 3.5% in October, and 2.

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Producer Prices Up 0.3% in December, Unprocessed Goods Spike 8.3%

January 16, 2017

The seasonally adjusted Producer Price Index (PPI) for final demand rose 0.3% in December as prices for finished wholesale goods increased 0.7%, while margins of final services providers increased by 0.1%.  This followed a November report that indicated the overall PPI had increased 0.4%, with prices for finished goods up 0.2% while final demand for services rose 0.5%, and an October report that indicated the PPI was unchanged, with prices for finished goods up 0.4% while final demand for services fell 0.3%.   Producer prices are now up 1.6% from a year ago, a figure which is now rapidly increasing, since most of the price decreases relating to lower oil and commodity prices went by the boards in early 2015.  While investors may follow this index as a leader of consumer inflation, its primary importance to us is as an adjustment for changes in price to metrics in other economic reports.  Other than personal consumption expenditures, imports, and exports, most other components of GDP, including all inventories, are deflated with components of this index. 

As noted, the price index for final demand for goods, aka ‘finished goods’, rose by 0.7% in December, after rising by 0.2% in November, 0.4% in October, 0.5% in September, but after falling by 0.4% in August, as the index for wholesale energy prices rose 2.

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Further Deterioration of Trade Deficit in November Means A Bigger Hit to 4th Quarter GDP

January 9, 2017

Our trade deficit rose by 6.8% in November as the value of our imports increased while the value of our exports was somewhat lower. The Census report on our international trade in goods and services for November indicated that our seasonally adjusted goods and services trade deficit rose by $2.88 billion to $45.24 billion in November from a revised October deficit of $42.36 billion.  The value of our November exports fell by $0.4 billion to $185.8 billion on a $0.7 billion decrease to $122.4 billion in our exports of goods which was partially offset by a $0.3 billion increase to $63.5 billion in our exports of services, while our imports rose $2.4 billion to $231.1 billion on a $2.7 billion increase to $189.0 billion in our imports of goods which was slightly offset by a $0.3 billion decrease to $42.1 billion in our imports of services.  Export prices were on average 0.1% lower in November, so our real November exports would be greater than the nominal value by 0.1%, while import prices were 0.3% lower, meaning real imports were greater than the nominal dollar values reported here by that percentage….
The drop in our November exports of goods resulted from lower exports of capital goods and automotive vehicles, which were partially offset by increases in our exports of industrial supplies and consumer goods.

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US gasoline production at record levels, but supplies are still dropping on record exports

January 2, 2017

Prices for both oil and natural gas reached 2016 highs on Wednesday of last week before sliding lower, in trading volume that was about one-third of normal.  After closing the prior week at $53.02 a barrel, prices for US oil rose steadily after the markets opened on Tuesday, closing 1.7% higher at $53.90 a barrel, as traders focused on the OPEC and non-OPEC production cuts that are set to begin next week.  The OPEC inspired rally continued into Wednesday, with prices hitting $54.33 a barrel before getting knocked back when the American Petroleum Institute’s weekly report showed a 4.2 million barrel increase in commercial crude oil inventories, instead of the expected 1.5 million-barrel drawdown, but oil still closed at an 18-month high of $54.06 a barrel.  Prices continued to slide on Thursday, even though the EIA reported a much smaller 614,000 barrel increase in oil supplies, and ended the day down 29 cents at $53.77 a barrel.  Oil prices then slipped again on Friday, amid profit taking before the long weekend, closing at $53.72 a barrel, and thus ended the year up 45%, in the largest annual increase since 2009…
Prices for natural gas, meanwhile, rose from the pre-Christmas close of $3.662 per mmBTU (million British thermal units) to $3.

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3rd Quarter GDP Revised to Indicate Growth at a 3.5% Rate

December 26, 2016

The Third Estimate of our 3rd Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services increased at a 3.5% annual rate in the quarter, revised from the 3.2% growth rate reported in the second estimate last month, as personal consumption growth was revised higher, state and local government shrunk less than was previously estimated, and private non-residential fixed investment increased, rather than decreased as was previously reported.  In current dollars, our second quarter GDP grew at a 5.0% annual rate, revised up from the 4.6% reported in the 2nd estimate, increasing from what would extrapolate to $16,583.1 billion annually in the 2nd quarter of this year to an annualized $16,727.0 billion in the 3rd quarter, with the headline 3.5% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 1.4%, aka the GDP deflator, was applied to the current dollar change.

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Oil Production Cuts Could Result in 600,000 Barrel Per Day Global Deficit in First Half of 2017

December 19, 2016

Oil prices remained volatile last week, as countervailing waves of avarice and anxiety about the coming Russian and OPEC led production cuts swept over the oil markets, but by the end of the week they were little changed from last week’s close.  What might have been the largest price move of the year for US oil was unleashed before the week even started, as oil prices jumped $3 a barrel to $54.50 a barrel at the opening of Asian trading at 11 PM on Sunday, as global oil traders reacted to the agreement by Russia and ten other non OPEC oil producers last Saturday to join the cartel in cutting their oil output.  Prices in New York were as high as $54.51 a barrel after US markets opened, the highest price since July 6, 2015, but fell back from there over the rest of the day to close Monday up just $1.33 at $52.83 a barrel.  Oil then traded 50 cents higher on Tuesday morning, but slipped back to close at $52.98 a barrel after the American Petroleum Institute reported large increases in crude and gasoline inventories.  Prices then fell back to close at $51.04 a barrel on Wednesday, despite the EIA report that US crude supplies had actually fallen, as the IEA (International Energy Agency) reported that OPEC had pumped 34.2 million barrels a day in November, a record high that was 300,000 barrels a day higher than their October record.

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The 18% Jump in Our October Trade Deficit Portends a Big Hit to Q4 GDP

December 12, 2016

Our trade deficit rose by 17.8% in October as the value of our exports decreased and the value of our imports increased.  The Census report on our international trade in goods and services for October indicated that our seasonally adjusted goods and services trade deficit rose by more than $6.4 billion to $42.6 billion in October from a revised September deficit of $36.2 billion. The value of our October exports fell by $3.4 billion to $186.4 billion on a $3.5 billion decrease to $123.1 billion in our exports of goods and a $0.1 billion increase to $63.3 billion in our exports of services, while our imports rose $3.0 billion to $229.0 billion on a $2.8 billion increase to $186.5 billion in our imports of goods and a $0.2 billion increase to $42.4 billion in our imports of services.   Export prices were on average 0.2% higher in October, so the relative real decrease in October exports would be greater than the nominal decrease by that percentage, while import prices were 0.5% higher, meaning real imports were smaller than the nominal dollar values reported here by that percentage.
The drop in our October exports of goods resulted from lower exports of foods, feeds and beverages, industrial supplies and materials, and consumer goods.

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OPEC agrees to cut production back to March levels, oil prices spike 14%

December 4, 2016

At their meeting in Vienna on Wednesday, the member nations of OPEC agreed to cut their oil production by 4.5% for a period to run 6 months, effective January 1st.  The amount of oil output each member is expected to forgo is generally based on their October production, although for some countries, such as Iran, the baseline for the output cut has been adjusted for special factors.   Libya and Nigeria, whose recent production has been disrupted by civil conflict, will be exempt from the cuts.  Indonesia, an OPEC oil importer who would not agree to a cut, was suspended from OPEC, and what they would have cut was to be absorbed by other member.  Figures released by OPEC indicate they want a cut of almost 1.2 million barrels per day, or roughly in line with what we previewed last week.  In addition, OPEC announced that non-OPEC oil producers, who were not represented at the meeting, will contribute an additional output cut of 600,000 barrels per day.  Presumably, details on those non-OPEC oil production cuts will be worked out at a December 9th meeting at Doha, but since Russia is on board with a cut of 300,000 barrels per day, achieving that target should not be difficult.  Oil traders apparently believe that OPEC and other producers will be able to achieve what they’ve set out, because since the announcement of the deal, oil prices have risen 14%…

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15 Million Fracking Jobs at Risk; 12 Million Export Jobs Could Also Be Lost

November 7, 2016

On Friday, the US Chamber of Commerce released a report, apparently timed for the weekend before the election when a number of fracking initiatives are on the ballot nationally, which alleged that "14.8 million jobs could be lost, gasoline prices and electricity prices could almost double, and each American family could see their cost of living increase by almost $4,000" if fracking were banned in the US.  The 58 page pdf, “What If Hydraulic Fracturing Was Banned?” covers the recent 10 year history of fracking, then projects what they imagne would happen to the US economy over the 2017 to 2022 period if a fracking ban were initiated, and finally wraps up with scary state specific scenarios for Ohio, Pennsylvania, Colorado and Texas.  Their report is long on conclusions, but pretty short on methodology, and some of the links they cite are already broken.   I was hoping to ignore it, but by Saturday morning it was already being picked up by the news services, with several headlines indicating that a fracking ban would kill 15 million jobs. So we’ll just quickly make a few points on how outrageous that allegation is…
As of the October employment report from the Bureau of Labor Statistics, which was coincidentally was also released on Friday, direct oil and gas industry employment was at 172,300 payroll jobs.

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