Tag Archive for 'economy'

New Electric Drive Caterpillar 988K XE Wheel Loader

Tom Ewing’s Environmental Update

*  Well, this is a bit awkward!  EPA’s Office of Inspector General (OIG) reports that in 2015 and 2016 EPA paid over $1.5 million for subsidized and unoccupied parking spaces at DC headquarters and Region 4 Atlanta, the only two offices that subsidize parking.  These weren’t criticisms for employees who needed to park, either.  (Other EPA offices provide “free” parking but the OIG report doesn’t include that non-cash benefit.)  The OIG points out that a 2015 Executive Order established “a clear overarching objective of reducing greenhouse gas emissions across Federal operations” encouraging agencies to “promote sustainable commuting.”  OIG found sloppy program accounting, too, with good-role-model parents apparently using their kids to qualify for car-pool spaces, which were granted even though car-pool participants didn’t list an email address on application forms, as required.  Tsk tsk… Do as we say, not as we do!
*  Someone named V V makes some thoughtful points about regulatory costs in comments to a Federal Highway docket.  V V has an interesting angle, first noting that the US GDP is around $17.6 trillion.  Then, he/she cites recent estimates that regulations cost the US economy about $1.88 trillion.  Next, some comparative figures: $2 trillion (rounding up a bit) is equivalent to more than half the 2014 level of fiscal budget outlays ($3.5 trillion), and nearly four times the $482 billion deficit.  Regulatory costs rival the level of pre-tax corporate profits, which were $2.235 trillion in 2013.  US households “pay” $14,976 annually in hidden regulatory tax ($1.882 trillion in regulation 125.67 million “consumer units”), “equivalent” to 23% of average income before taxes.  If US regulatory costs of $1.88 trillion were a “country”, it would be the world’s tenth largest economy, between India and the Russian Federation.  Hey, V V – thanks!  Happy Monday, Dude *:)) laughing!

*  EPA has a public hearing scheduled to take comments on the “Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” a.k.a., ending the Clean Power Plan.  Okay, public hearings aren’t anything new, but this meeting won’t be held in boring ol’ Washington DC or Arlington or Alexandria with the usual bunch of over-paid suits milling around checking their phones.  No sir, this meeting will be held in wild wonderful West Virginia, right in the heart of coal country.  Wow, passion and policy wonks in the same room at the same time.  Should be fun.

Tom Ewing
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Bouchier’s Cats Have Multiple Lives

Wells Fargo Reports: Through Hurricane Effects, CPI Inflation Looked Anemic

Consumer prices rose 0.5 percent in September as gasoline prices surged in the wake of recent hurricanes. Core inflation rose less than expected and suggests the trend in inflation remains rather tepid.

Here Comes the Story of the Hurricane

As was widely expected, the Consumer Price Index posted one of its largest monthly gains of recent years in September amid a jump in energy prices. The combination of refinery outages following Hurricane Harvey and millions of Floridians hitting the road to avoid the path of Hurricane Irma sent gasoline prices up 13.1 percent in September. All told, gasoline accounted for about three-quarters of the headline’s 0.5 percent increase last month.

Beyond energy, however, the effects of Harvey and Irma appeared much more modest. Replacement demand for autos following the storms was not enough to arrest the slide in prices that has been in train since early this year. Despite a 12-year high in new vehicle sales, prices slid 0.4 percent.Used vehicle prices were also down (0.2 percent), although the drops in August and September were the smallest of this year.

Hotel prices may have gotten a lift from the large-scale evacuations, but the 1.5 percent rise in September does not look unusually large relative to the swings in recent months; the lodging away from home index has swung by a greater magnitude in four of the previous five months.

Excluding food and energy, the core index suggests the trend in inflation remains weak relative to the start of the year. Core inflation rose 0.1 percent, which was enough to bring the 3-month annualized rate up to 2.0 percent. While that is above the current year-ago rate and points to the 12-month change edging a bit higher in the coming months, it continues to run below the roughly 2.2 percent pace of late last year.

Core services rose more moderately in September (up 0.2 percent) amid more subdued gains in shelter costs, medical care, and transportation. Meanwhile, core goods prices fell for a seventh consecutive month due to the aforementioned declines in prices for autos, but also apparel, prescription drugs, and household furnishings.

Transitory or Persistent Is Still an Open Question for the Fed

At a time when the Fed is closely examining all inflation data for clues about whether the slowdown that began last spring is likely to be temporary or persistent, today’s CPI report does not provide much comfort. As indicated in the statement and minutes following the September meeting, FOMC members expected to see inflation lifted temporarily by the hurricane-related bump in gasoline and other items last month. Yet the modest increase in core inflation is likely to keep many Fed officials concerned about the near-term path of inflation and whether another rate hike will be warranted in December. Fortunately for the data-dependent Fed, there will be two more CPI and PCE inflation reports before the December decision, meaning there is still time for greater clarity to emerge.

Source: U.S. Department of Labor and Wells Fargo Securities

Wells Fargo Reports: Construction Spending Rose in August

Total construction spending was up 0.5 percent in August, though July’s drop was worse than first reported. Public spending was up slightly in August after considerable weakness in June and July.

Outlays Up Across the Board in August

  • Construction spending was up 0.5 percent in August. Revisions brought more of June’s weakness to July. Beyond the month-to-month volatility and revisions, total construction is running 4.7 percent ahead of last year on a year-to-date basis.
  • Private construction is buoying total construction outlays as the government continues to spend less on most construction categories. Public outlays are down 5.3 percent year-to-date.

Private Residential Had Solid Footing Pre-Storms

  • Private residential construction outlays were up 12.6 percent year-to-date through August. Both single- and multifamily units were up solidly. Construction spending data in coming months are likely to be very volatile due to hurricanes derailing projects and as rebuilding gets underway. The seasonal adjustment will likely exacerbate impacts during fall months. We expect residential construction to be a drag on GDP until maybe next spring.