A lot has been made of the similarities between 2011 and 2008, and $4+/gallon gas is high atop the list.
So does that mean we’re going to see a replay of that year’s horror show?
In a note put out last Friday, Citi’s Jeff Black states the never re-assuring phrase “It’s different this time.”
Well, what’s different? Simply, the other economic fundamentals are better.
For example, in 2008, growth in personal consumption expenditures was shriveling, whereas now it’s still growing (nicely, in a v-shape).
Disposable income was also going in the wrong direction at the time.
And finally, the savings rate was at razor thin levels back then, whereas now it’s rebounded.
All that being said, it’s not hard to draw a line between softening macro numbers and the surging gasoline prices. We’re not sure if anyone will feel relieved by any of this.
With any luck, gasoline will plunge this summer.