Amy,
re: "Gasoline prices jumped $.15/gallon in one month, from mid-March... Gasoline & elec are expected to increase this summer."
Off the top of my head. Gas usually goes up in the summer months, I think, because consumption goes up. Still, assuming the average driver uses 10 gallons a week, that's $1.50 per week tax, $78 a year. It doesn't sound like much on an individual basis, but when multiplied by 125 million drivers (+/-?)... I wonder how that matches up with the tax cut proposal? A sincere paranoid (Scumbria?) might find it interesting that with a new President from Texas we are getting a tax cut that will mostly go directly to increased sales/profits at the large oil companies. (In Florida we've got GW wanting to drill for oil off the gulf coast beaches, Jeb Bush his brother opposing. Political suicide, in this state, for Jeb if it gets approved).
I haven't followed the electricity debate, but I think it's more regional than gasoline. (Here in Florida our biggest problem is water).
Another balance is lower interest rates, and folks refinancing mortgages. That can have a bigger impact than gasoline or electricity on discretionary spending, $100's of dollars a month. In most areas of the country home prices are still going up, the dotcom and tech implosion has hit California much worst than other areas, so I think your impressions may be generalized. If the stock market continues up, on balance, that also contributes to the wealth effect.
So I would say that the gasoline situation isn't as bad as it was last summer and fall, when the prices were up ~40 or 50%. Enough to slow growth a bit, but not stop it.
M (very) HO,
John |
