Most of the trade publications in the energy industry continue to talk about “strong demand” for energy products, including gasoline. They, in fact, never actually stopped using the description even though the global economy came perilously close to recession conditions in the second half of 2015. It became common from trade groups to point out that usage last year hit [...]
For the first time in three years, oil inventories in the United States are not rising precipitously more than the seasonally expected. At the start of both 2015 and 2016, oil stocks exploded higher as oil prices crashed, all related to the “dollar” flex on the front end of the futures curve creating sufficient contango necessary to strip that oil [...]
When US exports were reported a few months ago to have risen (slightly) in August 2016, it was widely expected that that increase was the start of many to follow. It was, after all, the first positive number on the export side since the end of 2014 after more than a year and a half of nothing but contraction. In [...]
While certain markets continue to dream of the economy that might be, we continue to be stuck with the economy that continues to be nothing like it. Last week the Census Bureau reported that exports fell slightly year-over-year in September 2016 after rising slightly in August for the first positive number in two years. On the import side, marginal US [...]
Durable goods continue to suggest a weak economy that only seems to remain in that state. Year-over-year, unadjusted estimates for new orders rose slightly for the first time since May, while seasonally adjusted total orders (including the transportation sector) were fractionally lower at $226.9 billion. That amount was 2% less than January 2016 and 4.3% below August 2014. Once again [...]
At the end of August, the US Energy Information Administration reported that it had been overstating domestic demand for oil and energy products to a considerable degree. Using imprecise and lagging data, the calculations for the amount of product being exported overseas was understated by an average of 16%. That meant more output was being used elsewhere, thus less product [...]
In yet another data point that identifies depression rather than a Great Recession, the Wall Street Journal reported last week what most people outside the economics profession had realized a long time ago. Janet Yellen likes to say that the housing market is recovering, highlighting the economic sector as one of the few bright spots left. The FOMC regularly and [...]
Basic economics has proven that when the supply of something dwindles, absent an offsetting drop in demand the price should rise. When translating these fundamental terms to the labor market especially of the past few years, the supply means “slack” or the available pool of workers not yet working; demand has been, we are told repeatedly, very robust; therefore the [...]
As usual, everyone is focused on the wrong part of the FOMC statement. There is already a lot being made about the one sentence inserted as “hawkish” sentiment that puts the economy, supposedly, back on its fruitful, “full employment” track. In a clear sigh of relief undoubtedly in relation to the scary May payroll report, the July 2016 FOMC statement [...]
Inventory is an exceedingly simple concept spaced between the most basic economic fundamentals. Because the modern economy operates upon mass production, the flow of goods is not direct. Thus, there are structural differences between demand and supply, with inventory as the pivot in between. If end demand rises it still gets filled even though production cannot respond instantaneously (no matter [...]
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