Ok, Now It's Official...The Sh*t Is Hitting The Fan

Quick Overview

Wholesale gasoline prices are falling to seasonal lows not seen since 2019, indicating weakening demand and a loss of momentum in the real economy, contradicting official GDP data, which the speaker argues is being drastically overstated by Federal Reserve Chair Jerome Powell.

Key Points: Wholesale gasoline prices hit new lows as of January 2, 2026, matching levels last seen around November 29, 2023, demonstrating weak seasonal demand. NYMEX WTI Futures for gasoline show a clear downtrend in the futures curve, moving into contango, which implies falling expectations for future prices. The US Energy Information Administration (EIA) data shows gasoline supply is running at 8.76 million barrels per day, unchanged from the previous year, implying weak demand despite high production driven by artificial factors like tariffs. Federal Reserve regional manufacturing PMIs (average of five indices) have been negative for 35 consecutive months through December 2025, with the latest reading at -13.6. The University of Michigan's Consumer Sentiment Index shows expectations for unemployment next year hitting the second-highest level on record, indicating severe consumer pessimism. S&P Global's PMI data shows a significant gap between production growth and falling orders, the widest since the 2008-2009 financial crisis, suggesting current production levels are unsustainable.

Context: The video analyzes current economic indicators, focusing on energy prices (gasoline futures), manufacturing health (PMIs), and consumer sentiment, to argue that the official narrative of a strong economy, exemplified by Fed Chair Jerome Powell's optimistic views, is contradicted by underlying real-world data showing weakening demand and increasing economic strain.

Detailed Analysis

The speaker asserts that wholesale gasoline prices are currently falling to seasonal lows, which contradicts official economic optimism, particularly that expressed by Federal Reserve Chair Jerome Powell. He highlights that gasoline futures are trading flat or slightly down, unlike typical winter behavior, suggesting demand weakness. The EIA data for weekly product supplied of finished motor gasoline shows the latest 4-week average near 8.76 million barrels per day, unchanged from the prior year, indicating a lack of growth despite artificial highs caused by tariff distortions. Furthermore, Federal Reserve regional manufacturing PMIs have been negative for 35 consecutive months through December 2025, with the latest reading at -13.6, showing manufacturing contraction. The services sector PMI is also deeply negative at -13.6. Consumer sentiment data from the University of Michigan shows expectations for unemployment next year are at the second-highest level on record, indicating widespread pessimism. The S&P Global Manufacturing PMI data reveals the widest gap between production growth and falling orders since the 2008-2009 financial crisis, signaling that current production levels are unsustainable. The speaker concludes that all these metrics—falling energy prices, weak PMIs, and collapsing consumer sentiment—point toward a significant loss of momentum heading into 2026, regardless of what official GDP figures might suggest.