RT @Neil_Irwin: Another terrible jobless claims number. Semi-benign explanation: Pessimistic workers are quicker to file claims. Non-benign: Double dip time.
RT @Neil_Irwin: Another terrible jobless claims number. Semi-benign explanation: Pessimistic workers are quicker to file claims. Non-benign: Double dip time.
A perspective:
We keep getting told repeatedly that this is the worst recession in 75 years, that housing is flat, unemployment is nearly 10%, that nearly nothing in the business sector is moving enough to make a difference….and gas is still $2.50 to $3 a gallon.
More than anything else, this is the number that consumers encounter every day. And this number affects everything from manufacturers’ transportation of goods (in diesel fuel) to how much of your monthly income is spent getting to work and thus not being spent on other things.
There will not be any real economic recovery as long as gas remains above $2.50 a gallon in a majority of the country. Simple as that.
Why? What’s so magic about $2.50 a gallon?
There will not be any real economic recovery as long as gas remains above $2.50 a gallon…
If this were true, wouldn’t Europe have been in an economic Great Depression for all of recent history?
Wasn’t the economy doing great when gas was nearly $5 a gallon a few years ago? Traffic was better too.
I remember when poor George W. Bush was getting criticized night and day about how bad of a president he was, and all the Republicans said, “you won’t know how good or bad he was until years after he leaves office.” Something about a Legacy. Now it seems like he’s the only president without a legacy.
To Jim: The psychological factor. There were lots of stories about how $3 or $4 a gallon was the magic number that was going to affect attitudes about driving. I say $2.50 a gallon because until 2004, nobody in the Great Flyover (Chicago excluded) had even SEEN a gas price start with “$2”.
To Brendan:
1. Europe’s gas prices have always been higher. A 150% runup in three-four years wasn’t an issue.
2. Europe is smaller. To illustrate: When my brother went to a camp in Germany, he told his group that the closest city to him they might have heard of was Chicago, 300 miles away. They were surprised at the distance.
3. Aside from perhaps Germany, much less of a “car culture.” (If we really wanted to conserve gas we’d find a way to ban loop-scooping.) Much less of a dependence on cars for everyday AND business/industrial transportation, period.
4. Unemployment rates above 8% are not uncommon in Europe, even in good times.
To Sandy: When gas was nearly $5 a gallon a few years ago, a lot of people were finding themselves forced to decide between paying for gas or paying their mortgages. The rest of “the economy doing great” was smoke and mirrors in the financial markets.
Actually, gas at $2.50 is weird. It should be higher. We’re in the middle of peak driving season. It has been at about this level since early spring at least.
I’m not sure why it is as cheap as it is at the moment.
B. Minich – I suspect that gas staying “relatively” low supports JD’s hypothesis …
If energy costs go down enough, so will the cost of gas … (well, eventually) … and energy costs going down are likely to help businesses to stop shrinking and even, hopefully, to grow again …
(I’m *still* very happy I now drive a Prius)
I will add that quite a bit of the jump can be accounted for by teachers who had been laid off at the end of last school year, who have been substituting all year, re-opening their claim once this school year ended.