Weekly Economic Update: September 5 – September 9, 2017

September 05, 2017

CHART OF THE WEEK

U.S. Less Reliant on Gulf of Mexico for Crude Oil Supply

Federal Offshore Gulf of Mexico: Share of U.S. Crude Pol Production

Federal offshore oil production in the Gulf of Mexico had been contributing a rising share of total U.S. crude production reaching almost 30% before fracking and horizontal drilling technologies enabled much expanded on-land production in various areas of the country. The sources of U.S. crude are more dispersed now with the Gulf contributing less than one-fifth.

LAST WEEK

News & Commentary Weekly Highlights

MarketWatch: Hurricane Harvey highlights biggest impact of shale-oil revolution

Wall Street Journal: The Hurricane Learning Curve

CNBC: US revised second-quarter GDP up 3.0% vs 2.7% rise expected

Economics21: Taxes Won’t Eliminate Federal Deficits

Wall Street Journal: White House Won’t Require Firms to Report More Pay Data

JEC Releases

Blockchain’s Medical Potential

August 2017 Jobs Review

Top Economic Indicator Highlights

Gross Domestic Product (Second Estimate) (Q2-2017, seasonally adjusted at annualized rates)

Category	2^nd estimate	1^st estimate
Second Quarter Real GDP growth	3.0%	2.6%

Noteworthy: Second quarter real GDP growth was revised upward from 2.6% to 3.0% due to faster consumption spending and non-residential business investment growth than initially estimated. This was partially offset by downward revisions of government spending. The third and final estimate for the second quarter’s GDP numbers will be released September 28 at 8:30am.

Personal Consumption Expenditures (PCE) Deflator (July 2017; percentage changes from same month last year)

Category	July	June	May
Overall PCE Deflator	1.40%	1.42%	1.52%
Core PCE Deflator (excludes food and energy)	1.41%	1.51%	1.48%

Noteworthy: The Fed’s main inflation indicator fell from 1.42% to 1.40% as did the “core” measure, which excludes volatile food and energy prices. These slowdowns in the inflation rate make additional Fed rate hikes less likely for this year.

Employment Situation (August 2017)

Category	August	July	June
Nonfarm payroll jobs (thousands)	156	189	210
Headline unemployment rate (U-3)	4.4%	4.3%	4.4%
“True” unemployment rate (U-6)	8.6%	8.6%	8.6%

Noteworthy: BLS reported that 156,000 nonfarm payroll jobs were created in August, which fell slightly short of expectations. In the past, seasonal measurement issues have led the initial August jobs number to be underreported by an average of 55,000 from 2010 to 2016.