<80% of the assumed "excess" tax refunds to come in early 2004 should total approximately $40 billion.>
That's about enough to allow the consumer to cover his new increased food and energy bill for about two months. Consumer spending on energy (gasoline, fuel oil, electricity, and NG) was about $300 billion a year. The correlation between the commodities like crude oil, unleaded gas, heating oil, and natural gas, and consumer spending is pretty direct. I'd guess those items are now up 15-20%, or $45 to $60 billion a year. If prices stick that's $4 or $5 billion a month in new energy costs.
Food spending runs about $900 billion year. Finished consumer foods PPI ran at 8.7% in Dec. (seasonally adjusted annual rate for 3 months ended). And judging from the lift-off in all kinds of food commodities in January, we could probably double that again. If it sticks, the consumer may be facing $150 billion a year ($12.5 billion) in new food spending costs. Personally I think the food number goes even higher.
Reuters
UPDATE - Extreme cold forecast in U.S. over next 2-3 weeks
Tuesday January 20, 5:49 pm ET
By Bernard Woodall
NEW YORK, Jan 20 (Reuters) - The United States east of the
Rocky Mountains will see extreme cold in the next two to three
weeks with at least one forecaster calling it the coldest in
25 years, meteorologists said on Tuesday.
"In the next six to 10 days, it will be colder than normal
north of a line from Washington, D.C., to Denver," said Joe
Bastardi of AccuWeather. "In the next 15 to 20 days, everybody
is extremely cold.
"In the worst-case scenario, in much of the energy-
consuming areas of the country, from the Rockies to New
England, you can look at the coldest 10- to 20-day periods
since the winters of 1977 and 1978," Bastardi said.
Crude oil and heating oil prices were up partly on colder
forecasts than last Friday when the markets were last open,
oil industry analysts said on Tuesday. Heating oil futures hit
$1.0250 a gallon, up 4.5 percent, with crude oil hitting a
high of $36.37 a barrel, up 3.7 percent. That was the highest
price since March 17, days before the U.S.-led invasion of
Iraq.
Natural gas futures hit a high of $6.32 per million
British thermal units, up 6.2 percent, with the link to
weather more clear, energy traders and analysts said.
Bastardi points out that he correctly predicted several
weeks ago that New England would experience its lowest
temperatures since 1994 or 1996, and that proved correct.
Not all forecasters agree, including some some
meteorologists who work with Bastardi at AccuWeather in State
College, Pennsylvania.
Another viewpoint comes from forecaster World Weather
Inc., who said the eastern United States will be cooler in the
first week of February, but that extreme cold is not very
likely, according to a Gulf Coast energy trader.
Chris Hyde, meteorologist with EarthSat forecasters, also
said the next two to three weeks will be colder than normal,
but he did not say whether temperatures will be as low as 1977
or 1978.
"The more notable change versus last week's forecast is
across the Midwest," Hyde said. "The Boston-to-Washington,
D.C., corridor will continue to hang tough with the chilly
readings with little volatility."
The National Weather Service is predicting that Friday,
the Midwest and Northeast will have temperatures 8 degrees
Fahrenheit to 12 degrees F below normal, with Jan. 27 still
showing below-normal temperatures for northern New England and
with temperatures near normal for New York City.
Forecaster Meteorlogix said the five-day outlook for the
Northeast shows up to 12 degrees F below normal by Wednesday
and up to 15 degrees F below normal by Saturday. In the same
time period, the Midwest will be up to 10 degrees F below
normal on Wednesday and up to 4 degrees F below normal on
Saturday.
The six- to 10-day forecast shows "below normal"
temperatures for the Northeast and northern part of the
Midwest, Meteorlogix said on Tuesday.
Here is a capsule of EarthSat's temperature forecasts:
Six to 10 days:
New England: Much below normal (same forecast as last
Friday)
Mid Atlantic: Below normal (same forecast as last Friday)
Midwest: Much below (versus below normal last Friday)
Ohio Valley: Normal (same)
Oklahoma/Texas: Seasonal to above normal (same)
11- to 15-Day Forecast:
Northeast: Much below normal in northern New England,
below normal elsewhere (same)
Mid Atlantic: Below normal (same, but bigger area
considered below normal)
Midwest: Below normal (versus normal last Friday)
Oklahoma/Texas: Seasonal to above normal (warmer than last
Friday) |
