A new rule proposed by the Department of Labor would mean that millions of workers would be eligible for overtime pay if they work more than 40 hours per week.

In a Wednesday statement, the labor department proposed bumping the annual salary threshold from the current $35,568 per year set by the Trump administration to around $55,000 under the Fair Labor Standards Act, the Wall Street Journal reports.

Those who are salaried, make over $55k (est.), or work in a “bona fide executive, administrative, or professional capacity” aren’t eligible for the time-and-a-half rate for working more than 40 hours per week, Bloomberg reports.

The change will benefit an additional 3.6 million or so workers according to the DOL. The department also proposes to auto-adjust this threshold every three years based on current earnings data.

That said, the proposal could have a domino effect on hiring and operational decisions within companies. Smaller businesses operating with slim margins might have to cut back on hiring, reduce hours, or even consider layoffs to offset the increased labor costs. Companies might also resort to legal loopholes or reclassify roles to skirt around these labor mandates, creating a whole new layer of bureaucratic mess.

Business groups that would be directly impacted by increased payroll costs under the rule change are expected to challenge the final version of the measure – particularly because of precedent set by previous litigation involving past overtime regulations.

An effort by the Obama administration to raise the salary threshold of the overtime test to $47,476, which would have offered new overtime protections to millions, was blocked in federal court in 2017. The Texas-based US district court found that the Obama-era salary threshold was set so high it made the job duties piece of the exemption test irrelevant, and expanded protections to workers Congress sought to exclude.

That ruling could be used as ammunition against the latest proposal from the Biden administration, if a court could similarly be convinced that the new threshold crowds out other parts of the test. The DOL’s latest proposal doesn’t include any major changes to the job duties provisions. -Bloomberg

While Democrats will be sure to cheer their new 2024 election talking point, the $55,000 salary cap falls far short of the $82,732 threshold some had suggested. 

Once the proposal is officially entered into the Federal Register, the public will have 60 days to submit input on potential changes, according to the report.

And one final thing, with all of the Biden administration’s crowing about bring down inflation (reminder, just slowing rate of ascent in prices, not actually lowering prices), how does the president think praising unions’ 40%-plus wage-hikes and encouraging a new wave of OT pay-hikes will affect ‘inflation’? Presumably, that money-supply sending gas prices and home prices higher will be Putin’s fault too (or Trump’s)?

By Todd Maiden of FreightWaves,

A hedge fund with an integral role in Yellow Corp.’s bankruptcy proceedings is pushing for shareholders to have a bigger say in the company’s upcoming liquidation.

MFN Partners, which amassed a more than 40% stake in the now-defunct less-than-truckload carrier during July, sent a letter to the company urging several changes.

Meet MFN Partners: the unknown hedge fund that quietly bought up 42% of YELL stock in the past few days pic.twitter.com/Z6A7aFB6bF

— zerohedge (@zerohedge) August 1, 2023

The firm said it has proposed a candidate to fill one of two board seats that were vacated the day Yellow filed for bankruptcy. The individual was not named. MFN said the candidate has “deep and relevant experience in structuring, implementing, and/or overseeing value-maximizing transactions in special situations to the Board.” It said it would put forth another candidate in the near future.

Yellow’s former chairman, Matt Doheny, left the board to assume duties as chief restructuring officer during the bankruptcy.

Boston-based MFN has also asked the company to consider an incentive program to retain key employees during the liquidation and said it called on the U.S. trustee overseeing the proceedings to form an official committee to protect shareholder interests.

In addition to its equity stake, MFN is one of Yellow’s bankruptcy lenders. The firm was recently named as one of two lenders that will provide the company a $142.5 million debtor-in-possession (DIP) financing package. Miami-based hedge fund Citadel is providing $100 million in financing, with MFN providing the remainder as well as a delayed draw of up to $70 million if needed.

The DIP deal presented by Citadel and MFN beat out an offer from Apollo Global Management (NYSE: APO), which was said to be the only viable offer available at the time of Yellow’s bankruptcy petition. Citadel entered the fray when it bought the $485 million term loan Apollo had with Yellow.

MFN is banking on a successful auction process as its lien position is junior to secured lenders and any proceeds left over after unsecured claims are met would be split among equity holders.

A key determinant will be the success the company has at marketing and selling a portfolio of roughly 170 terminals it owns. Former competitor Old Dominion Freight Line (NASDAQ: ODFL) set the floor for the value of those properties with a $1.5 billion stalking horse bid earlier this month.

Shareholders are hoping that Old Dominion’s offer will be topped by other suitors before or during the auction process. In addition to maximizing the proceeds on the real estate sales, shareholders are eager to see what the company’s fleet of trucks and trailers brings in. The company has valued those assets at approximately $900 million.

Yellow owes the U.S. Treasury $737 million from a controversial COVID-relief loan provided to the company in July 2020. The $400 million second tranche of the program, in which the Treasury holds first-lien position, was used to replace equipment. The bulk of the purchasing took place in 2021 and likely represents the latest models in Yellow’s fleet.

The Treasury also holds 30% of Yellow’s equity. It received those shares in addition to collateral at the time the loan was made.

Yellow listed secured debt of $1.2 billion in its Chapter 11 petition with total liabilities of $2.2 billion. Its unsecured claims include those from the pension funds, which have said in the past they are due billions from prior concessions made to the carrier to keep it afloat. In its recent quarterly filing, Yellow noted potential withdrawal liabilities from ceasing contributions to multiemployer pension plans in excess of $6.5 billion.

Counsel from Central States Pension Funds is chairing a recently formed unsecured creditor’s committee.

The rising mismatch between electric vehicle supply and demand is showing up at car dealerships as unsold EVs stack up. Dealerships tell Bussiness Insider that EV supply from automakers has been turned away as demand cools. 

Rising EV inventories and a Tesla-fueled price war could signal the beginnings of a pause in growth for the EV market. 

Scott Kunes, the chief operating officer of Kunes Auto and RV Group, which sells Detroit brands and Nissan and Mitsubishi in the Midwest, said: “We have turned away EV inventory.” 

Big Detroit brands are “asking us to make a large investment” in these EVs, Kunes added, “and we just want to see some return on that investment.”

A recent report from Cox Automotive shows automakers such as General Motors, Ford, Hyundai, and Toyota have more than 90 days’ worth of unsold EVs at dealerships in July. That’s about 92,000 EVs sitting at lots, more than three times the number compared with a year ago. New vehicle inventories are up about 74% from a year ago. 

“It’s not just that these vehicles are expensive — which they are. We’re talking about a much more nuanced lifestyle change,” said Sam Fiorani, the vice president of global vehicle forecasting at AutoForecast Solutions.

Fiorani said some lifestyle changes include 20-30-minute charges and range anxiety. He said, “It’s hard for the average customer to make that leap while spending an extra $10,000.” And not just the price but also the highest interest on new auto loans since 2009. 

Several dealers previously told Insider:

As a result, one East Coast Ford dealer told Insider they were only declining allocation of electric cars from the automaker. Another in the Midwest said Lightning orders were piling up uncompleted, leaving those customers with time to pick a different EV. One Hyundai dealer on the West Coast said they were also passing on EV-specific allocation, while another Hyundai dealer told Insider he anticipated having to turn away EVs soon.

EV demand might have plateaued while major automakers are still ramping up production. By 2026, the US market is expected to have 90 new EV models, according to AutoForecast Solutions. We suspect many brands will suffer with profitability. 

By Rystad Energy, via Oilprice.com

The reinvestment rate of US shale oil producers hit its highest level in three years in the second quarter of 2023, but the recent trajectory will not last, according to Rystad Energy research. Our analysis focuses on a peer group of 18 public companies, excluding majors, that collectively accounted for about 40% of total US shale oil output in 2022.

The group’s reinvestment rate was 72% in the second quarter of the year, up from 58% in the first quarter and the highest since the 150% seen in the second quarter of 2020. The reinvestment rate is the ratio between capital expenditure and cash flow from operations (CFO).

In years gone by, reinvestment rates often exceeded 100% and served as a clear indicator of the industry’s willingness to spend freely to rapidly grow volumes, a key driver of the early stages of the shale revolution. However, in the current era of capital discipline, public shale companies prioritize shareholder value and exercise caution over a gung-ho investment strategy. As a result, the reinvestment rate only tells part of the story.

Inflation has been pushing up drilling and completion costs and contributing to a rise in capital expenditure, while muted oil prices are dampening cash flow. Capital expenditure among the peer group has risen for 10 straight quarters, reaching $9.7 billion in the second quarter of this year, up from $7.8 billion over the same period in 2022. Meanwhile, the group’s CFO fell to $13.5 billion, continuing its steady decline since the third quarter of 2022, when it peaked at $24.6 billion, around the same time that oil prices spiked on the back of Russia’s invasion of Ukraine.

However, we expect this trend to reverse by the end of 2023. As inflation eases and global oil prices tick up due to ongoing tight supply, our forecasts predict a declining reinvestment rate before we reach 2024. The vast majority of operators have spent more than 50% of their guided 2023 budgets during the first two quarters, with several having only 45% or less to invest. Earnings call guidance from management also suggests that cost deflation across the board is imminent.

At first glance, a rising reinvestment rate might point to a return to the old days of aggressive capital expenditure and rapid production growth. However, discipline is the name of the game for public shale companies now, which ensures this trend will not last. As inflationary pressures ease in the coming quarters and oil prices rebound, this spike will be a short-term anomaly instead of a shift of strategy.

The peer group has shrunk due to recent merger and acquisition activity and is likely to shrink further as consolidation continues, and the number of public upstream companies dwindles. Ranger Oil Corporation was excluded from the peer group recently following the completion of its acquisition by Baytex Energy. Chevron’s recent deal to buy PDC Energy and Permian Resources’ acquisition of Earthstone will further reduce the peer group.

As with CFO, all other metrics declined in the second quarter. Earnings before interest, tax, depreciation and amortization (EBITDA) for the peer group fell by about half from its peak of $30.7 billion a year ago, while headline net income dropped for the third consecutive quarter. Both EBITDA and net income were down in the quarter for nearly every company in the group. Free cash flow was slightly more than $4 billion, the lowest level since 2020 and a measly 25% of the $16 billion in the third quarter of 2022.

Shareholder payouts for the group also fell during the second quarter, although the ratio of returns to capital expenditure remained extremely high in the historical context for both buybacks and dividends. Dividends as a ratio to capital spending was 28% in the second quarter, down from a high of 75% in the third quarter of 2022. Still, operators issued over $2.7 billion in dividend payments in the three months. To put that value in perspective, the sector had never paid more than $1 billion in dividends in a single quarter prior to the third quarter of 2021.

Stock repurchases were also down, at $1.7 billion, equal to 17% of capital expenditure. Investors have grown used to the previously unthinkable level of cash returns being provided by operators, a centerpiece of the re-branded public shale business model. Yet, they have also been generally understanding of the market conditions that have thus far inhibited further cash generation, and thus payouts. As many operators have bound themselves to cash return pledges and issued modest guidance for organic growth, investors have largely aligned their expectations to market conditions.

Authored by Steve Watson via Summit News,

During an interview with Glenn Beck, President Trump vowed that if he is reelected he will ‘lock up’ those who are trying to politically destroy him despite being completely corrupt themselves.

Referring to Hillary Clinton, Beck noted “You said in 2016, you know, ‘lock her up.’ And then when you became president, you said, ‘We don’t do that in America.’ That’s just not the right thing to do.”

The host continued, “That’s what they’re doing. Do you regret not locking her up? And if you’re president again, will you lock people up?”

Trump responded in the affirmative and noted “Well, I’ll give you an example. Uh, the answer is you have no choice because they’re doing it to us.”

Trump continued, “I always had such great respect for the office of the president and the presidency… And I never hit Biden as hard as I could have. And then I heard he was trying to indict me and it was him that was doing it.”

“I don’t think he’s sharp enough to think about much, but he was there and he was probably the one giving the order,” Trump continued, adding “But he was, you know, hard to believe that he even thinks about that because he’s gone. But then I said, well, they’re actually trying to indict me because every one of these indictments is him, including Bragg.”

“I don’t know if you know this, he put his top person into the office of the Manhattan district attorney. They’ve been in total coordination with Fani Willis,” Trump further asserted, adding “The woman that I never met, that they accused me of rape, that’s being run by a Democrat, a Democrat operative, and paid for by the Democrat party.”

“You know, so many these days, I have a couple of other lawsuits all funded against me by the Democrats. But these are sick people. These are evil people,” Trump concluded.

Watch:

.@glennbeck: “Do you regret not locking her up, and if you’re president again will you lock people up?”@realDonaldTrump: “The answer is you have no choice because they’re doing it to us.” pic.twitter.com/L1G6zCGQtL

— TheBlaze (@theblaze) August 29, 2023

Trump’s comments come after he issued an ultimatum to Congressional Republicans Sunday, to either impeach Joe Biden or “fade into oblivion.”

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Warner Bros. Discovery has appointed Mark Thompson as the next CEO and chairman of CNN, and will take the reins just as the 2024 presidential race kicks into high gear.

On Wednesday, the company announced that Thompson, who was knighted by Jimmy Savile pal King Charles earlier this year, will replace outsted CEO Chris Licht – who oversaw the mass firings of various woke talking heads in an attempt to restore credibility to the Russiagate hoax-peddling propaganda outlet.

“There isn’t a more experienced, respected or capable executive in the news business today than Mark, and we are thrilled to have him join our team and lead CNN Worldwide into the future,” said Warner CEO David Zaslav in a Wednesday press release. Thompson will report to Zaslav, while a leadership team that has been in place since Licht’s departure will continue in their roles, Deadline reports.

He will face immediate pressing issues, including CNN’s latest attempt to venture into streaming with the pending debut of CNN Max. That portal, to be part of the WBD streaming service Max, will feature the CNN International live feed as well as new programming from CNN talent. The network has made several previous dives into the streaming arena, and will be trying to catch up to its rivals. MSNBC had a hub on Peacock’s premium tier, while Fox News has the subscription streaming service Fox Nation. All of the major broadcast networks also have their own ad-supported services.

At The New York Times, where served as president and CEO from 2012 to 2020, Thompson is credited with dramatically increasing digital subscriptions and more than doubling digital revenues, as the media outlet became one of the success stories of the transition from print. Among other things, the Times established digital brands like the podcast The Daily and features content like Wirecutter. -Deadline

Thompson, a 40-year news veteran, has had quite the interesting career path, hopping from the BBC to the Guardian, and then to the NY Times, where he served as its CEO from 2012 to 2020.

“I couldn’t be more excited about the chance to join CNN after years of watching it and competing against it with a mixture of admiration and envy. The world needs accurate trustworthy news now more than ever and we’ve never had more ways of meeting that need at home and abroad. Where others see disruption, I see opportunity. I can’t wait to roll up my sleeves and get down to work with my new colleagues to build a successful future for CNN,” Thompson said in a statement.

We can’t wait to see what he does with the Fake News Network…

By Stefan Koopman, Senior Macro Strategist at Rabobank

Jolly JOLTs

The first headline that caught my eye when I started writing today’s Global Daily was a rather perplexing one. Bank of Japan board member Naoki Tamura said that even if the Bank of Japan were to abandon negative interest rates, it shouldn’t be viewed as monetary tightening or a rate hike. His logic? Monetary conditions would stay loose regardless. This twisted reasoning left me scratching my head – if a rate hike isn’t a rate hike, then why do I bother analyzing rate hikes at all? (And why does this board member have a job?)

Wondering whether up is down and down is up in the upside-down world of central banking, I then stumbled upon a column arguing that with cooling jobs data, central bankers should move past their “fleeting and misguided infatuation” with labor market flows due to data quality issues. Traders were already known to dismiss the JOLTS figures as delayed, second-rate data. Why wait almost a month on JOLTS when the payrolls are coming out first Friday? And now central bankers are advised to look away as well? Why am I looking at numbers at all?

Yet, last time I checked, a rate hike is a rate hike, and central bankers are swearing by data-driven decisions. They have elevated relatively novel metrics like the V/U ratio as key data points, so there got to be at least a grain of importance in these numbers. So, perhaps against better judgement, let’s dive into those jolly JOLTs.

The headline was a sharp drop in vacancies to 8.83 million in July – the lowest since early 2021 and the sixth decline in seven months. The decline is accelerating. Over the past three months, 1.49 million openings have vanished, signalling rapidly falling labor demand. The labor market might be cooler still if you believe the number overstates real demand by including fake job openings. It has been reported that some companies post cheap online ads they might not really be trying to fill. That said, that V/U ratio of openings to unemployed has retreated to 1.51, down from almost 2 earlier this year.

Another measure points to normalization as well. The quits rate, which measures voluntary job leavers as a share of total employment, fell to 2.3%, the lowest since early 2021 and equaling the pre-pandemic average. The “Great Resignation”, or, better, the “Great Reshuffling”, with millions more workers quitting their jobs to take on better-paying jobs elsewhere is over. This reduced job-hopping suggests cooling wage growth in coming quarters, as employers feel less pressure to attract and retain workers.

The reduction in openings and quits is happening at the same time as layoffs remain at around all-time lows. This is a necessary ingredient for a soft landing. So that’s good news, but of course a soft landing is not secured. Given the monetary lags and a lot of policy pain still in the pipeline, there is no guarantee these labour market dynamics will suddenly stabilise at rates that are consistent with roughly 3% pay growth and 2% inflation. Indeed, in recent weeks the economic surprise index has been rolling over pretty quickly, taking place just as Wall Street went all-in on the soft landing thesis.

Coincidence or not, the Conference Board’s consumer-confidence index showed a renewed deterioration in sentiment. The headline rate fell to 106.1 in August from 114.0 in July. Crucially, the sub-index that measures how hard it is to get a job ticked up to 14.1, the highest since April 2021 – indeed, right before the Great Reshuffling – while the sub-index of those saying that jobs are plentiful fell to 40.3 from 43.7. This 26.2 point labour differential is a fresh low for this cycle and consistent with an increase in the unemployment rate. So, when consumers are telling the same tale, the JOLTS figures aren’t as flawed as some would suggest.

Update (1113ET): 

Dangerous storm surge. 

INCREDIBLE VIDEO | Heartbreaking footage to watch. This is a time-lapse video from Steinhatchee, Florida early Wednesday morning as storm surge from Hurricane Idalia pushed ashore. Surge values could top out over 10 feet in spots around this location. #Idalia #FLwx pic.twitter.com/xyMABT0Ylq

— Zach Covey (@ZachCoveyTV) August 30, 2023

*   *   *

Update (0806ET):

Idalia was downgraded to a Category 3 hurricane as it made landfall in the Florida Big Bend. Maximum sustained winds are estimated to be 125 mph, according to the latest National Hurricane Center update. 

7:45 AM EDT update: Extremely dangerous Category 3 Hurricane #Idalia makes landfall in the Florida Big Bend. Maximum sustained winds were estimated to be 125 mph. Catastrophic storm surge and damaging winds ongoing. pic.twitter.com/umMdj8dD5d

— National Hurricane Center (@NHC_Atlantic) August 30, 2023

Idalia made landfall around Keaton Beach. 

BREAKING: 7:45 AM EDT update: Extremely dangerous Category 3 Hurricane #Idalia makes landfall at Keaton Beach, FL. Maximum sustained winds were estimated to be 125 mph. Catastrophic storm surge and damaging winds ongoing. pic.twitter.com/leeXe3zahR

— Jonathan Weant❄️⛈️🟦 (@JonathanWeant) August 30, 2023

Severe flooding is being reported. 

#BREAKING Hurricane Idalia makes landfall on Florida’s west coast as a dangerous Category 3 storm. The St. Petersburg Fire Dept. rescued one person so far from flooding at a mobile park. High winds and storm surge expected from the storm. #Idalia https://t.co/c8KnUgdonT

— Deon Guillory (@DeonGuillory) August 30, 2023

JUST IN – Massive storm surge in Cedar Key, Florida#idalia #hurricaneidalia pic.twitter.com/Mpkcm7clv0

— Mouh Phat (@MouhPhat) August 30, 2023

The scene in #CedarKey, #Florida as #HurricaneIdalia has only just made landfall. That means this #StormSurge #flooding will only get worse for the Big Bend of #FL…#Idalia #FLwx #tropics #catastrophic https://t.co/6ctOoWm5dz

— Alex Wasilenko (@WasilenkoAlex) August 30, 2023

#BREAKING – Major #stormsurge flooding happening right now in #Steinhatchee. This still was just captured from one of our affiliates. #Idalia pic.twitter.com/AAvjNVhHI5

— ABC 27 (@abc27) August 30, 2023

*   *   *

Hurricane Idalia intensified into a Category 4 storm early Wednesday morning as it is expected to make landfall near Florida’s Big Bend area. 

As of 0600 ET, the National Hurricane Center said Idalia was about 55 miles west-northwest of Cedar Key and 95 miles south-southeast of Tallahassee, moving north-northeast at 17 mph. The storm has maximum sustained winds of 130 mph. 

Category 4 Major Hurricane #Idalia is close to making landfall. Radar shows intense rain bands moving across northern Florida and southern Georgia.

NHC are forecasting catastrophic impacts from storm surge inundation of 12 to 16 feet ⚠️

Live radar map → https://t.co/RPH6VNVban pic.twitter.com/eHMUQHumJH

— Zoom Earth (@zoom_earth) August 30, 2023

“Idalia could continue to strengthen before it reaches the Big Bend coast of Florida in a few hours,” NHC said, adding, “While Idalia should weaken after landfall, it is likely to still be a hurricane while moving across southern Georgia, and near the coast of Georgia or southern South Carolina late today.”

Catastrophic and life-threatening storm surges are expected between the Wakulla/Jefferson County line and Yankeetown. NHC said these areas could expect a wall of water up to 16 feet. 

The National Weather Service in Tallahassee called Idalia “an unprecedented event.” The destructive winds have already led to 70,000 utility customers without power in Florida, according to online outage tracker PowerOutage.us.

Images of flooding along Florida’s Gulf Coast are already being reported on X. 

Big problems with storm surge in #gulfport #stpetebeach #tampabay #HurricaneIdalia pic.twitter.com/o2wrLSaCMv

— Jonathan Petramala (@jpetramala) August 30, 2023

Street flooding this morning at Tarpon Center Drive and along Golden Beach Blvd., Villa Drive and and Flamingo Drive pic.twitter.com/oW7LJOaQVE

— City of Venice, FL (@CityofVeniceFL) August 30, 2023

Gulf Boulevard in Pinellas County. This is dangerous flooding. pic.twitter.com/5XTMSnlGMi

— Spectrum Bay News 9 Weather (@bn9weather) August 30, 2023

Florida Gov. DeSantis provides an update on Idalia… 

“That level of storm surge is life threatening,” the governor said about the potential 16-foot storm surge in some areas. pic.twitter.com/pF7vBHVbKV

— WPEC CBS12 News (@CBS12) August 30, 2023

*Developing 

Authored by Steve Watson via Summit News,

During a discussion with the House Foreign Affairs Committee Tuesday, Gold Star father Mark Schmitz labeled Joe Biden a “disgrace” and an “asshole”.

The committee is investigating the botched Afghanistan withdrawal and the suicide bombing in August 2021 at Kabul airport that killed 13 U.S. service members

Schmitz, who lost his son during the attack, Marine Corps Lance Cpl. Jared Schmitz, said Biden has “more American blood” on his hands “than any president in U.S. history.”

“Not a single person has been held accountable,” Schmitz urged, adding “Our so-called leader can’t seem to even utter their names in public, not even once.”

Addressing Biden, he said ‘You, sir, stole their lives, their futures, their dreams and have ripped apart 13 families.”

“Two years has gone by, and where are we? To be frank, we’re knee deep in bulls***, is where we are,” Schmitz asserted, adding ““Everyone who held a key position in the military still has that position or has been promoted.”

Again addressing Biden, he continued, “we’ve seen the way you’ve been treating us as Gold Star families. And there couldn’t be anything more disgusting and cowardly than the way you have treated us. You are a disgrace to this nation. You have no business having ultimate command over our military, and I regret not saying that to your face when I had the opportunity in Dover.”

Watch:

Wow. Mark Schmitz, whose son was killed in Kabul during the Biden Afghanistan withdrawal, goes scorched earth.

Says the admin has the families “knee-deep in bullshit,” Biden is a “disgrace” to the United States, and Blinken/Austin need to “pack up their shit” and resign. pic.twitter.com/q1dWugT9an

— Dylan Housman (@Dylan_Housman) August 29, 2023

Related:

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Another data point, another major downward revision lower.

In the past month, the Biden Department of Goalseeking Stuff Higher Before Quietly Revising It Lower The Next Month (BDOGSHBQRILNM) has been busy, and after slashing jobs, JOLTS, new home sales, housing starts and permits and industrial production, moments ago it took the machete to Q2 GDP, which in the first revision of the “data” was just cut to 2.1% (or rather 2.07% to be specific), down from an initial “red hot” print of 2.4% which turned out to be nothing more than some overzealous political activist’s excel adjustments, and well below the consensus estimate of 2.4%.

The revision according to the BEA, which stands for Biden’s Economic Alterations, “reflected a smaller decrease in inventory investment and an acceleration in business investment. These movements were partly offset by a downturn in exports and decelerations in consumer spending and federal government spending. Imports turned down.”  In short, everything was uglier,

Taking a closer look at the data, we find the following changes to the bottom line:

• Personal consumption added 1.14% to the bottom line print or just over half, up from 1.12% in the original print; annualized this comes out to 1.7% which was below the 1.8% estimate.
• Fixed investment contributed 0.66%, down from 0.83%
• Change in private inventories now subtracting 0.09% from the bottom line number, a big swing from the positive 0.14% print in the original estimate. And it will be revised even lower next month as more of the “shrink” emerges.
• Net exports were  also revised lower, with gross exports trimmed from -1.28% to -1.26%, while imports were revised from 1.16% to 1.04%
• Finally the ever handy plug that is government consumption (which is a garbage concept since the government does not actually create anything of economic value in the economy but merely allocated graft and embezzlement of public funding), actually rose from 0.45% to 0.58% (of bottom line GDP). Without this revision, Q2 GDP would have printed below 2.0%

Separately, gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased
1.7% in the second quarter after increasing 3.8 percent in the first quarter, above the 1.6% estimate last month but below the consensus 1.8%. Excluding food and energy, prices increased 2.4% after increasing 4.2%.

Personal consumption expenditure (PCE) prices increased 2.5% in the second quarter after increasing 4.1% in the first quarter. Excluding food and energy, the PCE “core” price index increased 3.7% after increasing 4.9%. This number was also revised lower from 3.8% and missed estimates of 3.8%.

Finally, the BEA reported corporate profits decreased 0.4% at a quarterly rate in the second quarter after decreasing 4.1% in the first quarter. Profits of domestic financial corporations decreased 12.1% after decreasing 2.3 percent. Profits of domestic nonfinancial corporations increased 0.9% after decreasing 5.0 percent. Profits from the rest of the world (net)increased 4.4 percent after decreasing 2.0 percent. Corporate profits decreased 6.5 percent in the second quarter from one year ago.

Needless to say, all this is a far cry from the rebound in corporate profits that companies themselves reported in their various GAAP and non-GAAP metrics, which is to be expected in a world where there is now an uncrossable chasm between economic data and its government fabrications.

And now we wait for the Altanta Fed to slash its Q3 GDPNow estimate from 5.9% to 1%, because at this rate the final Q2 GDP revision next month will print well below 2.0%