Good Data, Bad Outlook
Week in Review: Sep. 25-29
This was a stellar week for economic data. Gas and diesel prices fell, we keep pumping out oil at a near-record pace, inflation came in cooler than expected, and jobless claims remain extremely low. But (and nothing before the but really matters) we’re hurtling toward a government shutdown, recent increases in energy prices have yet to be fully reflected in published monthly data, student loan repayments begin in a few days, consumer saving rates are down, and there is a broadening UAW strike out there. Plenty of ammunition for us glass half empty people, and I remain one of those.
Let’s talk about the latest newsmaker: the federal government shutdown. How will that impact the economy? Well, non-essential federal employees would be furloughed, and essential federal employees would be asked to work without pay (both groups would be paid when the shutdown ends). A bunch of children would lose access to Head Start, meaning a couple thousand families would have to find other childcare if they want to keep working. Wait times at airports could soar if TSA officers decide they don’t want to work without pay.
And, most importantly to this newsletter, it would delay the release of next month’s economic data. You’re probably thinking that sounds like a minor problem, but the Fed is at a critical juncture in their fight against inflation; a soft landing is a lot harder to achieve when you’re flying blind.
Gas prices fell during the week ending September 25th but, at $3.96/gallon, are up about $0.13 from the same week last year. That’s a 3.4% increase, roughly in line with economywide inflation.
Diesel prices fell for the first time since the beginning of July. Despite the recent runup, diesel is still about $0.30/gallon cheaper than it was last year.
TSA Checkpoint Travel Numbers
Nearly 17 million people passed through TSA security during the week ending September 27th. That’s up 12% from the same week last year and 5% from the same week in 2019. According to the wedding website The Knot, September 23rd is the most popular day of 2023 for weddings, and it sure seems like that caused a huge spike in air travel.
New Home Sales
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