Friday, October 6, 2017

GDP now: as of today, 2.5% estimated for 3Q17 --

Latest forecast: 2.5 percent — October 6, 2017

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.5 percent on October 6, down from 2.8 percent on October 5.

The forecasts of third-quarter real consumer spending growth and third-quarter real private fixed investment growth declined from 2.5 percent and 1.8 percent, respectively, to 2.2 percent and 0.9 percent, respectively, after this morning's employment report from the U.S. Bureau of Labor Statistics.

The model's estimate of the dynamic factor for September—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—fell from 1.53 to 0.18 after the report.

Active rigs:

$49.57↓↓	10/6/2017	10/06/2016	10/06/2015	10/06/2014	10/06/2013
Active Rigs	59	33	67	191	183

RBN Energy: crude oil shuttle pipelines in the Permian's Delaware and Midland basins, part 3.

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JOBS

So, was I correct yester-afternoon/evening when I wrote:

Jobs. The unemployment report for September, 2017, is to be released tomorrow. Never take President Trump literally, but always take him seriously. Perhaps he is talking in "generalities" in this tweet, but when he says unemployment is the "lowest it has been in decades" suggests he has seen the data that will be released tomorrow. So, we'll see.

Yeah, I think the president had the numbers last night.

Over and over all morning on CNBC: the job market lost 33,000 jobs vs an expectation of a gain of 95,000 jobs.

Only once was the unemployment rate mentioned in the headline story. The U3 unemployment rate dropped unexpectedly more than forecast.

"Everyone" was watching the number of jobs in light of the two epic hurricanes. Usually, "everyone" focuses on the unemployment rate. But not this time. "Everyone" focused on the numbers. Forecast: an increase of 95,000 jobs; actual: a decrease of 33,000 jobs.

Big deal. This is the real story. For decades it was a two-digit number: the unemployment rate.

Today. "they" focused on 95,000 and 33,000 -- two numbers tthat 99% of Americans won't understand.

What 99% of Americans will understand is that the unemployment rate unexpectedly droped from 4.4% to 4.2% That's the lowest rate since February, 2001.  Yes, since 2001. As Presdient Trump said last night, "unemployment the lowest in 16 years."


So, now we know (although, in fact, we "always knew") the president has the data the day before the number is released.

By the way, lots of talk about a jobs number that actually declined. This is rare but not unprecedented. It was also negative in September, 2010 (under the Obama administration) -- a fact not mentioned on CNBC. The two "large" hurricanes in September, 2010 (Igor, Julia) did not hit the US (Igor caused some large waves off the coast of the US and one person drowned off the coast of North Carolina). 

One other interesting data point. I pointed out that for the first time in history, CNBC is now paying attention to U6, now that Trump is in office -- this is a "higher" unemployment number than the reported U3 and during the Obama administration no one wanted to touch U6 on the morning talk shows. U6 is 8%+ compared to the 4.2% U3. With the Trump administration, we will see U6 being talked about more often.

Interestingly, the data took a bit of wind out of their sales. U6 actually improved. I have to look it up but I think it decreased from 8.3% to 8.1%. U6 was mentioned in passing on CNBC but it decreased, like U3, and they didn't spend much time on that.

Other good news:

• labor participation rate increased; per Drudge headline, "Americans pouring back into workforce"
• record number employed

But this is the graph that tells the story:

Disney World, motels, and cruise ships are already back in business.

"Pay attention to this." What's that all about? We discussed that yesterday at this long, meandering post in which we discussed the reason for the strength and duration of the bull market. 

Finally, at 10:05 a.m. eastern time, CNBC admits that experts see "good news" in this report.

Wholesale trade: link here --

• sales +1.7% to $473.4B.  -- wholesale sales forecast to be 0.0% (CNBC's Santelli); 1.7% is a huge number -- and even bigger when forecast was for 0% and in light of two major hurricanes
• inventory to Sales ratio rises to 1.28.