If you want to understand why Gasoline prices have had only a moderate impact on the Economy, consider its price on an inflation adjusted basis.
CotD notes: "Over the last five weeks, the
average US price for a gallon of unleaded has shot up 28 cents per
gallon and has reached 20-year highs. However, when adjusted for
inflation, it is clear that gasoline prices still have far to go before
they reach the inflation-adjusted peak of $3.07 that occurred back in
click for larger graph
Source: Chart of the Day
The biggest equity impacts so far has been twofold: it has put a damper on sales at retailers of the most price sensitive consumers — Tthat means the bigger discounters (Wal-Mart,Target, Kmart, Kohls, etc.).
Second, sales of the largest and most profitible SUVs are slowing. This has a disproportionate impact on GM and Ford. I’m not sure what the net net is on an individual (consumer) level; if you own a large SUV, I expect you will be disappointed at what you can sell it for, as long as gas stays near $2.50 per/gallon. Now consider all of the SUVs which have been leased over the past 3 years: Dealers will soon have a glut of them on their lots, if they don’t already, as lease renewal/extensions and trade ups slow.
After years of marketshare gains by Trucks/SUVs over Cars, sales may well shift back from the large inefficient Trucks towards smaller relatively more efficient Autos. (Where are CAFE standard improvements when you need them?) This presumes gas merely stays near $2.50; If it creeps towards $3, this will accellerate. And that plays into the product lines of Toyota, Honda, Nissan, Mazda, as well as VW and Hyundai.
Its almost too obvious to say, but it bears repeating: The price of Gasoline will continue to impact the macro economy and the post recession recovery for the foreseeable future . . .
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.