It’s been a while since the last one. So, without further ado…
2013 Summer Conference Update
Visit our conference page (click here) for more information on our upcoming Summer Conference (July 10th-12th, Shell Island Resort, Wrightsville Beach). Hotel rates and reservation information are now available.
What the @!#& is going on with gas prices?
You may have noticed that retail gasoline prices have spiked up SIGNIFICANTLY since the first of 2013. We’re finishing out the week with prices for regular unleaded in the $3.65 to $3.80/gallon range in most of North Carolina, with Diesel ranging from $4.00 to $4.20/gallon.
The 30-day increase is about 13% across the board, or approximately $0.45 to $0.50/gallon. For someone filling up a 15-gallon tank for their sedan, that’s $7.50 per tank (extrapolate that to get an idea of how it could effect your jurisdiction’s budget, or that of your household, or fellow residents).
Why is this going on? Is it the price of crude? Hmmm…
The year-to-year chart does not appear to indicate the crude prices are pushing fuel upward. So, what about projections on demand and supply? We can take a look at the Energy Information Administration’s short term outlook and see that…
EIA expects that falling crude prices will contribute to a decline in the national annual average regular gasoline retail price from $3.63 per gallon in 2012 to $3.55 per gallon in 2013 and $3.39 per gallon in 2014, about 11 cents per gallon and 4 cents per gallon higher than forecast in last month’s STEO, respectively. Diesel fuel retail prices averaged $3.97 per gallon during 2012 and are forecast to fall to $3.92 per gallon in 2013 and to $3.82 per gallon in 2014.
Well, that doesn’t explain it. What’s going on here? The EIA is suggesting that refinery margins are increasing, and the basic numbers would agree.
However, don’t forget what else is going on. Right now, the Fed is buying up more than $80 billion a month in Federal Treasuries, and is growing its share of ownership of the National Debt. Also, over the past two weeks, Venezuela (oil producing company) announced the formal devaluation of its currency, creating global concerns for broader currency devaluation across the country, and the likelihood of significant increases in commodity prices.
This week, the Bureau of Labor Statistics reported that consumer inflation in January was “unchanged” for the month, and only up 1.3% compared to last January. It’s doubtful they’ll be able to sell that “logic” for February when they report an update next month.
Unemployment Insurance Reform is Here
We held off discussing how local governments should calculate what they will need to budget to address the Unemployment Insurance reform plan passed by the General Assembly and signed into law by Governor McCrory this week. Now, Karl Knapp and his cohorts at NCLM has thankfully assembled the nuts and bolts.
Wells Fargo Economics Group
How’s Washington impacting the overall economy?
Fourth Quarter 2012 GDP retraction gave us an idea of just how significant Federal expenditures are to the overall economy, and the threat of sequestration could significantly impact individuals and economies in several North Carolina areas. Overall, North Carolina’s economy is significantly-influenced by Federal Spending, as it pertains to GDP (see map below).
Wells Fargo Economics Group/TBJ
Housing Continues Some Growth
Housing starts for January came in well below consensus expectations, but, after adjusting for an upward revision to December data, starts were just a shade weaker than the consensus had expected. The decline was entirely attributable to a drop in the volatile multifamily component. Building permits increased in January–not just for single-family homes, which climbed 1.9 percent on the month, but for multifamily as well,where permits increased 1.5 percent…Momentum in housing-related economic activity is not limited to residential construction. Existing home sales data for January also came in better than expected.
The Triangle housing market finished way ahead in 2012, with nearly 21 percent more home sales than in 2011. The comeback was so strong that sales almost regained the pace of four years ago.
The market continued double-digit gains in December, with sales increasing by 26.6 percent over the same period a year ago, according to the monthly report fromTriangle Multiple Listing Services. Nearly 1,960 home sales were recorded in December in the Triangle, which was up from 1,546 homes sales in December 2011.
For the year total, 23,829 homes were sold in the Triangle in 2012 compared to 19,733 in 2011, which was when the market hit bottom.
Articles/Videos of Interest
UNCTV’s Legislative This Week features highlights of Governor McCrory’s State of the State address from earlier this week: