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Inflation

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Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.

Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter. :2twocents
 
Smurf1976 said:
Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.

Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter. :2twocents
Click to expand...
maybe the EU isn't buying as much gas as predicted

but something is up ( awry )
 
Smurf1976 said:
Just a random observation but the collapse in the US natural gas price, now down to $3.34
Click to expand...
It might be a price collapse from recent ridiculous prices, but step back a bit?
At these prices, it's still up over 100%
from the end of 2019- pre covid.

There's been some crazy price gouging going on in many areas, they claim inflation, but it's a load of bulldust, pure price gouging.

Screenshot_20230106-235154.png
 
Smurf1976 said:
Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.

Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter. :2twocents
Click to expand...

Crude also falling. Let's see what the refiners think.

Meanwhile - Fed believes it can get the participation rate higher by reversing the wealth effect via tighter monetary policy.

www.stlouisfed.org

Retirements, Net Worth, and the Fall and Rise of Labor Force Participation

New research suggests that declining asset values in 2022 may have prompted older workers to return to the labor force.
www.stlouisfed.org www.stlouisfed.org
 
frugal.rock said:
It might be a price collapse from recent ridiculous prices, but step back a bit?
At these prices, it's still up over 100%
from the end of 2019- pre covid.

There's been some crazy price gouging going on in many areas, they claim inflation, but it's a load of bulldust, pure price gouging.

View attachment 151336
Click to expand...
still on the reduced EU demand theory ( which may or may not be correct )

possibly the demand reduction MIGHT be reduced EU commercial use as businesses closed down or trimmed production

that would agree with the sad German data posted above
 
frugal.rock said:
It might be a price collapse from recent ridiculous prices, but step back a bit?
Click to expand...
My basic thought though it's it's a price collapse under circumstances where one would normally expect the price to surge:

www.abc.net.au

'Worst storm probably in our lifetime': US winter storm death toll rises to at least 60

The death toll from one of the worst weather-related disasters in US history claims at least 60 deaths nationwide, with rescue efforts underway at multiple locations.
www.abc.net.au www.abc.net.au

Much of the rest of the United States has been hit by ferocious winter conditions.
Click to expand...

Bearing in mind that about half of US homes use natural gas for heating and more than a third use electricity, the marginal source of which is not entirely but substantially it's gas (since nuclear and renewables tend to be fully utilised regardless). So there's a strong link that cold weather = more gas burned.

So if a major storm hits, and the gas price not only doesn't go up but actually goes down, then to me that's saying something is up with the question being what?

Regardless of the reason though, gas is no longer pushing inflation up indeed it's now doing the opposite at least in the short term. :2twocents
 
waterbottle said:
Employment numbers hot but services PMI contracting. Not sure how the Fed with respond to that. It would be sensible to pause...
Click to expand...
Perhaps the employment data is not quite as rosy as seen at first glance.
The vast majority of Jobs were part time and second jobs, not new hirings.
From Zero Hedge
Reading the mainstream media's reaction to today's payrolls report, one would be left with the impression that it was generally on the goldilocks side and indicative of a possible soft-landing - consider this from Bloomberg: "the US labor market stayed resilient last month while wage gains cooled, raising hopes that the economy may dodge a recession and the Federal Reserve will further slow its aggressive campaign of interest-rate hikes."

Which is accurate: wage growth indeed slowed down following a major revision to the data (remember that 0.6% M/M jump in average hourly earnings that freaked out the market last month? Well, it was quietly revised to 0.4% today), and as a result - as even Fed mouthpiece Nick Timiraos pointed out earlier - "Revisions to average hourly earnings data paint a marginally less worrisome picture for the Fed on wages than the Nov report. The upturn in wage growth in Nov (originally reported as +0.6%) was revised (to +0.4%). The 4.6% annual wage growth in Dec was the lowest since Aug '21."

There was more: not only did average hourly earnings drop, but so did average hours worked, which has a major impact on the average wages, and had hours been flat, the decline in average wages would have been even more pronounced.

avg%20weekly%20hours.jpg

Ok, so wages are finally starting to reflect reality - and indicating that inflation pressures are clearly easing, which is to be expected for any economy sliding into a recession.

But what about the underlying issues with the jobs data? What about that massive divergence between the employment number (from the Household Survey) and the monthly payrolls change (from the Establishment survey). Recall that it was just last month that we reported that divergence between these two data sets hit a record 2.7 million, a difference which got added focus just a few days later after the Philadelphia Fed reported that its own calculations found that in Q2 the US added just 10,000 jobs, not the 1.1 million reported by the BLS.

The answer is that today, the BLS decided to finally shrink the record difference between the Household and Establishment surveys, and while 223K payrolls were added (a number which was actually down 244K on an seasonally unadjusted basis), the Household survey outdid itself, and its matching Employment number soared by a whopping 717K.
This means that contrary to conventional wisdom, some 684K jobs added in the past 10 months were not the equivalent of 684K workers finding a job, but 684K workers finding more than one job to afford life during this latest episode of soaring inflation.

What does this mean in the grand scheme of things? Well, the Philadelphia Fed's observations still stand, and while the BLS may claim that payroll prints were accurate (at least until next month's wholesale Establishment survey revision), digging deeper reveals once again that the quality composition of these jobs was far more dubious. In fact, we know that in December, the entire employment increase was thanks to part-time workers, and we don't have to tell readers that part-time jobs pay far less, have zero benefits and generally are far worse quality than full-time. It also means that the bulk of job growth since March has been in the multiple jobholder category, and that instead of 684K jobs having been given, what really happened is that 684K workers found more than one job to be able to afford living under the Biden administration.
Click to expand...
Mick
 
waterbottle said:
Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.

Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..
Click to expand...
CORE inflation actually rose though ;)
 
mullokintyre said:
Perhaps the employment data is not quite as rosy as seen at first glance.
The vast majority of Jobs were part time and second jobs, not new hirings.
From Zero Hedge

Mick
Click to expand...

Yep the BLS data was called out by one of the central banks. I agree that we might be seeing a difference between the accuracy of data particularly when the services PMI reports that services employment is decreasing too.
What will JPowell believe?
 
waterbottle said:
What happened during the tech bust & GFC RE: jobs? Where jobs figures similarly scrutinized?
Click to expand...
i only took any real interest in the stock market late 2010 ( anything earlier i had to learn from books/videos ) ( and my parents recollections of the great depression , that they grew up in )

but a relative used to work in the CES ( Centre-link , now ) now and had documents on data collection changes in 1989 , so messing with the figures is not new nor unique to the US

'massaged ' might be more accurate at official level
 

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