...Heavy to excessive rainfall likely across much of the Southwest/Intermountain West, as well as across south Texas... ...Much above normal temperatures likely this weekend across the central Plains, with a warming trend for parts of the West...
On the second Thursday of every month, NOAA issues its analysis of the status of ENSO. This includes determining the Alert System Status. Although the current status remains the same i.e. La Nina Advisory, the forecast has been adjusted slightly from last month. The forecast had called for the La Nina to continue but weaken during the Summer (which it did not). Then it is forecast to strengthen in the Fall and Winter. The timing is shown in the NOAA discussion and the IRI probability analysis.
It certainly looks like this La Nina will end early in 2023. But there is really no sound scientific basis for this prediction. From Emily Beckers’s post
If La Niña does decay to neutral in January–March 2023, it would be only the 4th time in the 24 La Niña winters we have on record.
Nevertheless, that is what both NOAA and I think will happen. But it could happen a bit earlier or a bit later.
...Monsoonal moisture to increase the threat for localized heavy rainfall and flash flooding across parts of the Southwest and Intermountain West... ...Tropical moisture likely to bring heavy rainfall to parts of south Texas this weekend... ...Much above normal temperatures expected from the northern High Plains to the central Plains...
Following along the path of the Consumer Price Index and the Producer Price Index, Import and Export Price growth slowed in July 2022. U.S. import prices moderated from 10.7% year-over-year to 8.8%. Export prices moderated from 18.1% year-over-year to 13.1%. Import prices are what affect the average consumer but there is no correlation between import price inflation and economic growth.
The U.S. economy looks weaker now than it did three months ago, according to 35 forecasters surveyed by the Federal Reserve Bank of Philadelphia.
| REAL GDP (%) | UNEMPLOYMENT RATE (%) | PAYROLLS (000S/MONTH) | |||||||
|---|---|---|---|---|---|---|---|---|---|
| PREVIOUS | NEW | PREVIOUS | NEW | PREVIOUS | NEW | ||||
| Quarterly data: | |||||||||
| 2022:Q3 | 2.5 | 1.4 | 3.5 | 3.5 | 293.7 | 342.5 | |||
| 2022:Q4 | 2.3 | 1.2 | 3.5 | 3.7 | 193.2 | 167.9 | |||
| 2023:Q1 | 2.1 | 1.1 | 3.5 | 3.8 | 158.8 | 89.0 | |||
| 2023:Q2 | 2.3 | 1.5 | 3.5 | 3.9 | 61.3 | 96.6 | |||
| 2023:Q3 | N.A. | 1.5 | N.A. | 4.0 | N.A. | 80.7 | |||
Preliminary University of Michigan consumer sentiment moved up very slightly this month to about 5 index points above the all-time low reached in June. All components of the expectations index improved this month, particularly among low and middle-income consumers for whom inflation is particularly salient.
| Aug | Jul | Aug | M-M | Y-Y | |
| 2022 | 2022 | 2021 | Change | Change | |
| Index of Consumer Sentiment | 55.1 | 51.5 | 70.3 | +7.0% | -21.6% |
| Current Economic Conditions | 55.5 | 58.1 | 78.5 | -4.5% | -29.3% |
| Index of Consumer Expectations | 54.9 | 47.3 | 65.1 | +16.1% | -15.7% |
A summary of headlines we are reading today:
These and other headlines and news summaries moving the markets today are included below.
...Monsoonal storms and the potential for flooding to continue for portions of the Southwest into the Great Basin and Rockies... ...Showers and thunderstorms leading to heavy rainfall expected along the immediate Gulf Coast through the early weekend... ...Below-average temperatures and drier air behind an advancing cold front will lead to a comfortable weekend in the Eastern region...
In the week ending August 6, the advance figure for seasonally adjusted initial claims grew 14,000 from the previous week’s revised level, and the 4 week moving average increased 4,500 from the previous week’s revised average.
The Producer Price Index final demand prices moved up 9.8 percent for the 12 months ended in July 2022. Producer prices are a measure of inflation from the perspective of producers whilst the Consumer Price Index measures inflation from the standpoint of consumers. The bottom line is both the CPI and PPI moderated in July – and going forward, the year-over-year growth will be measured against a period where inflation was growing. Therefore, it is easy to speculate that inflation will continue to moderate.
A summary of headlines we are reading today:
These and other headlines and news summaries moving the markets today are included below.
It is a good time to look at how the drought situation in the Continental U.S. has changed over the last couple of months. There is a big debate as to whether the increased precipitation in June and July really changed the situation or was simply a drop in the bucket and I am tending to agree with the “drop in the bucket” assessment. Keep on reading to find out why I have drawn that conclusion.
...Heavy rain and flash flooding threat continues from the Ohio Valley into the Mid-Atlantic and along the Gulf Coast... ...Monsoonal storms and the potential for flooding to continue for portions of the Southwest into the Great Basin and Rockies... ...Above-normal temperatures are expected from the northern Intermountain West into the northern and central Plains, while much of the East begins to cool down through late in the week...
The Consumer Price Index for All Urban Consumers (CPI-U) increased 8.5 percent year-over-year before seasonal adjustment – in June 2022 the index had increased 9.0 percent year-over-year. Over the gasoline component of the index moderated whilst food and shelter increased. Depending on how one spends their money, this 8.5 percent increase may be significantly higher. Although inflation did modestly moderate in July, it is still significant and likely puts on the table another 75 basis point increase in the federal funds rate during the September 20/21 Fed meeting.
June 2022 sales of merchant wholesalers, up 1.8 percent month-over-month and 20.4 percent year-over-year. Inventories of merchant wholesalers were up 1.8 percent month-over-month and up 25.5 percent year-over-year. The June inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.26. The June 2021 ratio was 1.21. Generally, the sales-to-inventory ratios spike during a recession.
The number of CEO changes at U.S. companies plunged to 58 in July, down 45% from the 106 CEO exits recorded in June. It is the lowest monthly total since April 2020, when the uncertainty and economic turmoil caused by the pandemic led to 48 CEO exits in that month. Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. stated:
The economy is facing uncertainty right now, but it’s much more positive than in early 2020. Inflation fell in July, gas prices are falling steadily, the job market remains tight, and supply chain issues have mostly cleared up. Consumers lack confidence at the moment and interest rates are rising to battle inflation, which might slow business borrowing and some growth plans.
The U.S. Treasury’s Monthly Treasury Statement shows the fiscal-year-to-date deficit is $726 billion, a record year-over-year decrease of $1.814 trillion (71%), for the first ten months of the fiscal year. Fiscal-year-to-date Receipts were $787 billion (24%) higher, while Outlays were lower by $1.027 trillion (18%). July has been a deficit month 66 times out of 68 fiscal years since there are usually no major corporate or individual tax due dates in this month.
A summary of headlines we are reading today:
These and other headlines and news summaries moving the markets today are included below.
...Hot weather to continue from the Northwest into the Plains, some relief by Wednesday for the Northeast... ...Heavy Rain and Flash Flooding threat from the Ohio Valley into the Central Appalachians... ...Monsoonal Showers to continue from the Southwest, portions of California and into the Great Basin...
