Worst Indicator Today? Gasoline Demand -- Latest GDP Forecast, 2Q17 -- 3.2% -- June 14, 2017

Updates

June 15, 2017: see comments below. A reader suggests why gasoline demand is lower this year compared to last year. I don't buy the reader's explanation, nor does Reuters: at the link, posted back in April, 2017, Reuters makes three points:

• last year's gasoline demand set an all-time record;
• the weather this year might explain the decrease in gasoline demand; and,
• most analysts expect gasoline demand to recover

Original Post

 

Latest forecast: 3.2 percent — June 14, 2017:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 3.2 percent on June 14, up from 3.0 percent on June 9.

The forecast for second-quarter real consumer spending growth increased from 3.0 percent to 3.2 percent after this morning's retail sales report from the U.S. Census Bureau and this morning's Consumer Price Index release from the U.S. Bureau of Labor Statistics.

On CNBC today, in passing, Rick Santelli says he doesn't believe these numbers, specifically when it was pointed out that retail sales fell this past month; he suggested "if you dig deep enough you can always find a nugget of gold" but he thought the 3.2% GDP forecast based on new data was BS.

Others agree: see comments.

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Gasoline Demand

One wonders if this is a most bearish sign -- and then note that the Fed "raised rates" today.

I've said often that if I had to pick only one economic indicator to reflect the health of the US economy, I would pick gasoline demand. If so, the above graph is very, very concerning. Not only is gasoline very inexpensive as we enter the height of US summer driving, but it comes at a time when an oil glut appears to be with us as far as the eye can see.

Note: current gasoline demand is less than it was a year ago today, but even worse, it has turned "downward."