Relevant and even prescient commentary on news, politics and the economy.

1st Quarter GDP Grew at a 6.4% Rate on Government Stimulus Spending

1st quarter GDP; March incomes & outlays, and March durable goods

Marketwatch 666, Commenter R.J.S.

Our economy grew at a 6.4% rate in the 1st quarter, quite a bit stronger than during the fourth quarter, as stimulus supported growth in personal consumption of goods and increased federal government consumption outlays more than offset weaker private investment, shrinking inventories, falling exports, and the negative impact of rising imports…the Advance Estimate of 1st Quarter GDP from the Bureau of Economic Analysis estimated that the real output of goods and services produced in the US grew at a 6.4% annual rate from the output of the 4th quarter of 2020, when our real output grew at a 4.3% real rate…in current dollars, our first quarter GDP grew at a 10.72% annual rate, increasing from what would work out to be a $21,494.7 billion a year output rate in the 4th quarter of last year to a $22,048.9 billion annual rate in the 1st quarter of this year, with the headline 6.4% annualized rate of increase in real output arrived at after an annualized inflation adjustment averaging 4.1%, aka the GDP deflator, was computed from the price changes of the components and applied to their current dollar change…. 

As is usual with an advance estimate, the BEA cautions that the source data is incomplete and also subject to revisions, which have averaged +/-0.6% in either direction before the third estimate for the quarter is released, which will be two months from now….note that March construction, March trade in services, and non-durables inventory data have yet to be reported, and that the BEA assumed a $15 billion increase in exports of services, a $2.5 billion increase in imports of services, a $7.6 billion increase in residential construction, a $1.2 billion decrease in non-residential construction, a $2.9 billion increase in public construction, and a $34.5 billion decrease in nondurable manufacturing inventories for March before they estimated 1st quarter output (see the Key source data and assumptions excel file that accompanies this report for more specific details).

Focus on Fracking

Commenter R.J.S.

Ohio anti-fracking activist joins Greta Thunberg to decry fossil fuel subsidies at Earth Day Congressional Hearing

A self-described “fracking refugee” from Belmont County, Ohio on Thursday joined Swedish climate activist Greta Thunberg on Earth Day to urge a congressional subcommittee to abandon subsidies to the fossil fuel industry when Congress passes its next infrastructure bill.

Jill Antares Hunkler told the House Committee on Oversight and Reform’s environment subcommittee she was forced from her home at the headwaters of the historically pristine Captina Creek Watershed. Her leaving her home was due to oil and gas infrastructure and pollution from a compressor station, It consisted of 78 fracking wells, a transfer station, and an interstate pipeline with numerous gathering pipelines. All of which were within a five-mile radius of her home.

Jill Hunker added a 2018 fracking well blowout in Belmont County caused one of the largest methane leaks in U.S. history, forcing area residents to evacuate from their homes. A brine truck accident contaminated Barnesville’s reservoir with radioactive materials. She added:

“The negative health impacts we experienced were too much to bear. First, we noticed the odors and had nose, eye, and throat irritation, as well as headaches. The symptoms worsened over time with nausea, vertigo, rashes, mental confusion, disorientation, numbness, and body aches and pains.

True wealth is good health, and our health and happiness suffered as long as we stayed in the hollow.”

Since the fracking boom began, she said Belmont and other eastern Ohio counties that produce natural gas have lost more than 6,500 jobs instead of gaining them, and the region’s population has declined. Hunkler:

“That’s why there’s little reason to believe the cutting of subsidies for the fossil fuel industry will result in lost jobs. The local oil and gas workers are often the least valued assets of the industry. They are exploited, given the worst, most dangerous, and often are the least-paid contract jobs without health care and retirement benefits.”

Al Gore: Stop the reckless, racist pipeline in Southwest Memphis 

Gasoline demand at an 8 month high

and imports of distillates at a 26 week low.. Commenter R.J.S.

Oil prices moved lower this week on rising Covid cases global​ly ​and on a surprise increase in US crude supplies . . .  after rising 6.1% to $63.13 a barrel last week  on strong economic data and on upwardly revised demand forecasts, the contract price of US light sweet crude for May delivery opened lower on Monday on trader’s jitters over surging Covid cases in Europe and India, but recovered to finish with a 25 cent gain at $63.38 a barrel as a weaker dollar supported prices by making oil cheaper for holders of other currencies. Oil prices continued higher early Tuesday, hitting a one month high of $64.30​,​ following reports of an outage in Libya, but pulled back on fears that India, (third-largest oil importer) would impose restrictions as coronavirus infections and deaths surged to record highs. and settled 94 cents lower at 62.44 a barrel, as trading in the May oil contract expired. Oil reports now referencing  the contract price of US light sweet crude for June delivery, which had closed down 74 cents at 62.67 a barrel on Tuesday, opened lower on Wednesday after the American Petroleum Institute reported an unexpected increase in crude supplies, and then tumbled to close $1.32, or more than 2% lower at $61.35 per barrel. This came after the EIA confirmed that crude oil stockpiles had unexpectedly edged higher last week. Oil prices continued falling early Thursday on expectations that rising coronavirus cases in India and Japan would cause demand to decline, but recovered to close 8 cents higher at $61.43 per barrel as traders noted that overall oil demand remained robust in the two largest oil markets, the U.S. and China. Oil prices moved higher again on Friday on strong economic reports from Europe and the US and settled with a gain of 71 cents at $62.14 a barrel but still finished with a loss of 1.6% on the week​,​ as spreading coronavirus cases in countries such as India tempered positive signs out of the U.S. and Europe.

That Prices were up the most since 2012 is probably also noteworthy . . .

CPI Rose 0.6% in March on Higher Prices for Energy and Transportation Services, R.J.S, MarketWatch 666

The consumer price index rose 0.6% in March, the largest monthly increase since August 2012, as higher prices for fuel, utilities, transportation services, financial services, and used vehicles were only slightly offset by lower prices for clothing and for communication commodities…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.6% higher in March, after rising by 0.4% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, but after falling by 0.1% last May, by 0.7% last April and by 0.3% in March of last year….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 263.014 in February to 264.877 in March, which left it statistically 2.6198% higher than the 258.678 reading of March of last year, which is reported as a 2.6% year over year increase, up from the 1.7% year over year increase reported a month ago….with higher prices for energy a major factor in the overall index increase, seasonally adjusted core prices, which exclude food and energy, were only up by 0.3% for the month, as the unadjusted core price index rose from 270.696 to 271.713, which left the core index 1.6464% ahead of its year ago reading of 267.268, which is reported as a 1.6% year over year increase, up from the 1.3% year over year core price increase that was reported for February, but still little changed from the 1.6% the year over year core price increase that was reported for December of 2020 . . .