I hate to take one commodity and declare there is inflation or deflation but overall inflation expectations help to drive inflation trends (is one specific thing the Fed claims to look at) and gasoline prices at the pump is something that we see everyday and is likely one of the most high profile price indicators the average person is exposed to. As of last night, the average gallon of gasoline according to AAA rose 2 cents breaking out to the highest level since Oct ’08 at $2.70, a 67% rise over the past year. They still remain however well below the high of $4.11 back in the summer of ’08 but the economic impact of its moves, if sustained, are worth monitoring. For every .10 move higher in gasoline prices, its almost an extra $14b annualized out of consumer pockets.

Category: MacroNotes

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.

5 Responses to “Gasoline pump prices break out”

  1. davossherman@gmail.com says:

    Nixon took gas out of inflation in the 1970s along with food. Oil is a big part of food.

  2. ashpelham2 says:

    I understand that gas and food is removed from core cpi because of their high seasonality, ie volatility, but these are necessities to every American, even every human. If they aren’t included in inflation, we are just kidding ourselves. Every time my employer passes on increasing my pay to cover inflation, then I fall behind. That is what has happened with impunity over the past 10 years, even though inflation has been considered ” in check” and incomes, per the government, have been increasing.

    Statistics cannot paint the picture that real-world, anecdotal evidence can show. I believe 4.00 gasoline pushed the us economy over the cliff. If we approach that number again, here we go double dip recession.

  3. JustinTheSkeptic says:

    But the push up in prices is caused by speculators in the market and have nothing to do with supply-demand. Do bubbles count as inflation when prices move up because of too much liquidity? Something is terribly wrong with the system! IN most instances the maket would react in a violent matter, and correct, but our governments will not allow that to happen.

  4. insaneclownposse says:

    Oil prices corrected from $140 a barrel to $35 a barrel. That’s pretty violent in my book. Like I’ve said before, if oil is in a bubble, then it is the first bubble in history to magically reinflate just months after collapsing. I didn’t see any commenters congratulating the “speculators” when they drove the price down below $50 last year.
    The speculators only become the bogeymen when the price of oil rises. Seems completely irrational to me….

  5. ashpelham2 says:

    It should be clear to everyone what role oil plays in world economics. It’s the ACE of Spades. There is no greater power than to those who control the oil. Everyone else falls at their feet. The only thing close to it are those who can manipulate it’s price. For this reason, the constant wild gyration in it’s price will continue. Oil was undervalued at 40/bbl. It’s overvalued anything above 90/bbl. That range probably has little effect on economies who net produce or net consume it. But outside of those ranges, you get 2600 meter superskyscrapers and near-depression level conditions elsewhere.