Obama No Drill Equals High Gas Prices
High prices at the pump are putting a squeeze on the family budget as the
traditional summer driving season begins. For every $10 the typical household
earns before taxes, almost a full dollar now goes toward gas, a 40 percent
bigger bite than normal.
Households spent an average of $369 on gas last month. In April 2009, they
spent just $201. Families now spend more filling up than they spend on cars,
clothes or recreation. Last year, they spent less on gasoline than each of those
The squeeze is happening at a time when most people aren’t getting raises,
even as the economy recovers. “These increases are not something consumers can shrug off,” says James
Hamilton, an economics professor at the University of California, San Diego, who
studies gas prices. “It’s a key part of the family budget.”
The Commerce Department reported Friday that consumer spending rose just 0.1
percent in April, excluding the extra money spent on more expensive gas and
food, while wages stayed flat for the second straight month.
I am just infuriated they ALWAYS say excluding volitile gas and food. By gosh, we ALL have to pay a lot for our food and our gas and it’s UP big time this year. So go kid someone else that inflation is not BADLY hurting people, ESPECIALLY in gas and food.
Only twice before have Americans spent this much of their income on gas. In
1981, after the last oil crisis, Americans spent 8.8 percent of household income
on gas. In July 2008, when oil price spiked, they spent 10.2 percent.
Average hourly earnings, meanwhile, have risen just 1.9 percent in the past
year. That’s only just enough to keep up with inflation. Same as before – inflation numbers with no food and gas are bogus to me.
In order for household gasoline expenses to return to their
historical place in the family budget for the year, gas prices would have to
fall by about half and stay that way for the rest of the year.
Demand for gasoline has fallen for eight straight weeks as drivers try to cut
back, but higher prices can’t keep drivers parked for long. Even with high
prices this year, the government expects gasoline demand to grow slightly for
“Drivers try to do what they can, but they have to go almost all the places
they go,” says David Greene, a researcher at the Center of Transportation
Analysis at Oak Ridge National Laboratory and manager of the Department of
Energy website fueleconomy.gov. “There’s no magic gizmo that will drastically
change someone’s gasoline use.”