One of the biggest fears people have is that gas prices will choke off the recovery, by draining people’s confidence and reducing other spending.So is that happening?
Well, last week we got a real scare.
As we noted, two specific indicators were very ugly. Gasoline consumption fell nearly 10% on a year over year basis, and some of the weekly retail tracking measures had some of their worst year-over-year gains in a long time.
Both of these datapoints were consistent with an economy that was getting choked by gas.
Well, the economy still might, but for now it doesn’t look like things are falling of a cliff.
The latest This Week In Petroleum report indicated that the year on year falloff in gas prices for the latest reading was less than 5%, meaning a decline much less severe than the week before.
And what’s more, the weekly shopping trackers improved.
On a year over year basis, the ICSC-Goldman retail tracker jumped back over 2.3% YOY.
The Johnson-Redbook index grew 3.1% year over year.
So this is a big relief. Things are still dicey, but at least the numbers from last week didn’t get worse.