The summer driving season is upon us. For many, that means vacations, barbeques, and of course, higher gas prices. For 23 out of the last 35 years, gas prices have risen an average of 14.7% from one summer to the next, while 12 decline years have only averaged -8.1%. Prices tend to be highest in June for any given year, with some years’ prices spiking in late May or early July. Retail gasoline prices are at their highest levels since 1980, in real dollars. But as we have uncomfortably noted previously, Americans have not returned to pre-crisis consumption patterns yet, despite all the chatter of recovery. So far in 2013, in fact, we have consumed 14 million fewer gallons of motor gasoline than in 2012, and nearly 55 million less than we did at the peak in 2007. But, as ConvergEx’s Nick Colas notes, we aren’t necessarily “cutting back”, as this data suggests: the Consumer Expenditure Survey shows that Americans spent nearly $700 more on gas in 2011 as compared to 2010, the two latest data sets available. What does appear to happening, though, is that Americans are restructuring their spending as healthcare, lodging, and overall taxes take a larger chunk out of every paycheck. Another explanation is fewer commuters to buy gasoline based on a still-high unemployment rate. Basically, we’re not necessarily consuming less ‘on purpose’: we’re just adjusting to a “New Normal” way of spending. What the data shows is a disconnect between the life of the average worker and the energy market: we assume that strength in the latter goes hand-in-hand with strength in the former. Unfortunately, the average American is being left behind: they’re still struggling.
Article IV, Section. 3 – U.S. Constitution
