Conflicting Reports: Atlanta Fed vs DOE on US GDP and Fuel Demand

Atlanta Fed's Positive GDP Projection

The Atlanta Federal Reserve proudly announced earlier today that the economic policies under President Biden, dubbed "Bidenomics", are significantly beneficial. This has led to their Q2 GDP Nowcast rising impressively to 4.2%, a jump from their previous estimate of 3.3%.

DOE's Report on Low Fuel Demand

Contrastingly, the Department of Energy (DOE), under the Biden administration, has reported a significant drop in the demand for gasoline and diesel in the United States. This report comes as part of their efforts to control oil, gas, and diesel prices, as a spike in oil prices could potentially harm Biden's chances of re-election. The report indicates that the demand for these fuels has dropped to its lowest since the start of the COVID pandemic, which has led to concerns about economic stagnation as refining margins hit new lows.

Details of the DOE Report

As per the report, the weekly average for the week ending May 3 shows gasoline demand at 8.63 million barrels per day. This is a figure that hasn't been seen since May 2020, at the start of the pandemic. The demand for distillates, which is a reliable measure of overall economic activity, has also dropped to 3.6 million barrels per day, another low since the pandemic. Furthermore, the 3-2-1 crack spread, a key indicator for refining markets, has fallen under $26.50 per barrel for the first time in three months.

Contradictions and Implications

These contrasting reports imply that either the US economy is shrinking, which would be detrimental for Biden, or the gasoline demand is higher than reported, which could also pose a problem for the President. However, in the current political climate, the truth often becomes a casualty in the quest for re-election. As a result, the public is presented with a distorted image of a booming economy and falling energy prices.

Analyst's Viewpoint

Robert Yawger, an analyst at Mizuho, expressed disappointment at the gasoline situation and suggested that it could be a negative indicator for the economy. The EIA inventory report showed an increase in U.S. distillates and gasoline inventory for the week ended May 3, while crude oil prices fell following the report.

Closing Thoughts

This article presents a thought-provoking scenario of conflicting reports from two major institutions. It raises questions about the true state of the economy and the accuracy of these reports. What do you think about this situation? Feel free to share this article with your friends and discuss it with them. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.