{"id":17011,"date":"2016-01-27T16:11:10","date_gmt":"2016-01-27T21:11:10","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17011"},"modified":"2016-01-27T16:11:41","modified_gmt":"2016-01-27T21:11:41","slug":"why-lower-gasoline-prices-are-not-stimulating-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17011","title":{"rendered":"Why Lower Gasoline Prices Are Not Stimulating Economy"},"content":{"rendered":"<h3><a href=\"http:\/\/www.mcoscillator.com\/learning_center\/weekly_chart\/why_lower_gasoline_prices_are_not_stimulating_economy\" target=\"_blank\">Why Lower Gasoline Prices Are Not Stimulating Economy<\/a><\/h3>\n<div><img loading=\"lazy\" decoding=\"async\" id=\"hero\" class=\"big_chart\" src=\"http:\/\/www.mcoscillator.com\/data\/charts\/weekly\/Gas_Consump_Jan2016.gif\" alt=\"Chart In Focus\" width=\"600\" height=\"349\" \/><\/div>\n<div class=\"chart_description\">\n<p>Fed officials and financial news reporters are collectively wondering why the economy seems to be slowing down, even though lower oil and gasoline prices ought to be a stimulative factor.\u00a0 If consumers are spending less of their money on gasoline, then they ought to have more to spend on other stuff, or so goes the reasoning.\u00a0 So why is it not working?<\/p>\n<p>The problem is one of magnitude, and most analysts fail to take the time to do the math. \u00a0So at the risk of boring you with arithmetic, let\u2019s look at some important numbers, with a bit of back-of-the-envelope math.<\/p>\n<p>The\u00a0<a href=\"http:\/\/www.eia.gov\/dnav\/pet\/pet_cons_prim_dcu_nus_m.htm\">EIA publishes data<\/a>\u00a0on consumption for a variety of energy products, including gasoline.\u00a0 In November 2015 for example (the most recent month for which there are data), Americans consumed gasoline at a rate of 358 million gallons per day.\u00a0 The 12-month average is 360 million gallons. \u00a0That sounds like a really large number, but when you realize that\u00a0<a href=\"http:\/\/www.census.gov\/popest\/data\/national\/totals\/2015\/index.html\">there are roughly 322 million resident Americans<\/a>, that works out to 1.11 gallons per day for every American.<\/p>\n<p>The chart above shows the trend for that data.\u00a0 The high prices of just a couple of years ago sent people into dealerships to buy Priuses, Volts, Teslas, and other electrified cars to avoid paying high gasoline prices.\u00a0 But the falling prices for automobile fuel are making consumers eschew those more efficient choices, and consume more gasoline.\u00a0 They are also consuming more diesel, which is not part of these computations, but it is nevertheless a real factor.<\/p>\n<p>Looking at the math, if the price of gasoline drops from $3.00 to $2.00 (round numbers to make the math easier), that means an extra $1.11 in your pocket every day, assuming you are the average man, woman, and child in America.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why Lower Gasoline Prices Are Not Stimulating Economy Fed officials and financial news reporters are collectively wondering why the economy seems to be slowing down, even though lower oil and gasoline prices ought to be a stimulative factor.\u00a0 If consumers are spending less of their money on gasoline, then they ought to have more to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[251,1423,12013,592,1775,3650],"class_list":["post-17011","post","type-post","status-publish","format-standard","hentry","category-economics","tag-eia","tag-gasoline-price","tag-mcclellan-financial-publications","tag-oil-price","tag-oil-price-collapse","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17011"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17011\/revisions"}],"predecessor-version":[{"id":17013,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17011\/revisions\/17013"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}