Saturday, February 04, 2012

President Obama’s Economy…

…. may not be improving as fast as many of us would it to, but, it is going much better than what the Republican Party would like for you to hear.

50,000 New Manufacturing Jobs, GM is #1, Gas Use @ 2001 Levels, Thank You President Obama

  Original Post  By FISHOUTOFWATER  on Friday, February 3, 2012

The reports of the death of American manufacturing were premature. President Obama stopped the long hard decline in U.S. manufacturing that began under President G.W. Bush. U.S. durable goods manufacturing added 50,000 jobs in January for a total of 418,000 jobs over the past 2 years. Hours worked in manufacturing were up 4.2 percent in the fourth quarter of 2011, giving a boost to worker pay. President Obama's decision to save GM and Chrysler, which was strongly attacked at the time by Republicans, saved America's manufacturing sector leading to today's good news. If GM had been allowed to shut down the ripple effect through the supply chain would have permanently damaged a large sector of American manufacturing. Today GM is the worlds number 1 producer of automobiles and Chrysler, which Republicans declared dead, is profitable again.

Auto sales were so strong that auto dealers added 7,000 new jobs in January.

In the goods-producing sector, manufacturing added 50,000 jobs. Nearly all of the increase occurred in durable goods manufacturing, with job growth in fabricated metal products (+11,000), machinery (+11,000), and motor vehicles and parts (+8,000). Durable goods manufacturing has added 418,000 jobs over the past 2 years.

The really good news that hasn't been reported with the auto jobs data is the large reduction in U.S. gasoline consumption. In January, gas consumption plummeted to levels not seen since the weeks after September 11, 2001. This is solid evidence that the Obama administration's bold initiative to turn GM into a producer of smaller fuel efficient cars is a resounding success. Clearly, the high price of gas has encouraged use of mass transit, car pools and more efficient trips, but no one can blame cold winter weather for the low gas consumption. Obviously, buyers are replacing old inefficient vehicles with new fuel efficient ones. Because people put off auto buying during the recession, pent up demand will continue this trend of replacing gas guzzlers with gas sippers. This isn't just good news for the environment. It's good for the economy. The U.S. economy will be less prone to go into a recession as oil prices rise because consumers who are using less fuel will be less sensitive to price hikes.

Total U.S. fuel consumption dropped to 1999 levels, putting strong downward pressure on the price of "West Texas" crude sold at Cushing, Oklahoma. The price of Brent crude, which is of similar high quality, was $16.74 higher at close of business today than West Texas Intermediate. President Obama's success in raising vehicle fuel economy standards will help further reduce consumption and will help keep gas prices from rising more.

Rising Cushing inventories also helped widen Brent’s premium over WTI, which has almost doubled this year, said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Enterprise Products Partners LP (EPD) plans to start shipping oil from Cushing to the U.S. Gulf Coast June 1 after the Seaway pipeline’s flow is reversed.

“Cushing stocks are increasing and there won’t be new pipelines until later this year,” McGillian said. He added that Asian demand is boosting Brent.

Crude prices may fall next week, a Bloomberg News survey showed. Fourteen of 34 analysts, or 41 percent, forecast oil will drop through Feb. 10. Twelve respondents, or 35 percent, predicted prices will increase and eight estimated there will be little change.

Total petroleum demand in the U.S., the biggest oil consumer, fell to 17.7 million barrels a day last week, the lowest level since May 1999, according to the Energy Department. Gasoline consumption decreased to 7.97 million barrels a day, the lowest level since September 2001.

Strong demand in Asia is driving up the price of Brent crude. Republicans are pressing for the construction of the Keystone XL pipeline so that the Koch Brothers can sell fuel they refined in Texas to Asia and world markets. Completion of additional pipeline capacity is not required to meet falling demand in the U.S. If the pipeline is built West Texas prices will rise to Brent levels.

President Obama is helping keep the price of gas down by not approving the Keystone XL pipeline.

Also republished by The Federation and Climate Hawks.

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