Financial Issues - Think Biblically about your finances.

Fri, 2/20/2015

Energy Holding Steady

Continuing low gasoline prices tell a story . . .


We are seeing crude oil prices hovering around $50 and Brent Crude Oil above $60. However, gasoline prices are makinglittle movement upward. It looks as though gasoline at a national price of $2.26 a gallon is holding steady. In fact, it continues to decline just a bit.


This is certainly a good thing for all of us as consumers. However, some are wondering, "Wait a minute . . . I thought gasoline prices were tied to oil prices. Why is that not happening?"


US Economic UncertaintyI think the price of gasoline price right now is a much bigger story for the broader economy than crude oil prices. The fact that gasoline prices are running steady confirms thatconsumers - the American public - are living in uncertainty. Gas prices are staying where they are because we are still in a low-demand environment. Many Americans are using their new-found discretionary income on things far more important to them than spending to boost the economy - things like paying debt down or building their savings. They are still uncertain about whether they will have a job tomorrow.


Keep in mind that our current labor participation rate goes back to 1978. At best, the lower gasoline prices are having a positive effect on a working population that is equal to the working population of 1978. I know this President and all his administration believe that a 1978 level of an economy is just fine. In fact, they are proud of the accomplishments that have been made in this economy. However, I imagine since few of them ever have to write a check, they have forgotten that we are now living some 30 years beyond that point, and we have had a significant work-age population growth. A 1978 workforce is extremely inadequate in 2015.


The positive effect from the gasoline prices Part Time Jobsis impacting a much smaller working population. Oh, we could count in the record-breakingpart-time labor force . . . but the key word there is part time. They are not spending their discretionary income in the economy. Because they are only able to get part-time work, they are using their discretionary income to pick up the slack in their personal finances.  


Gasoline prices that remain low amid rising crude oil prices tell a story about where the economy truly is . . . and what we might expect this year.




Financial Issues with Dan Celia

Fri, 2/20/2015
» Energy Holding Steady
Fri, 2/20/2015
Blaming A Strong Dollar
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We The People Can Still Make A Difference
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Consumer Spending, Thriving Economy, and Our Incomes
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What is the State of Our Union?
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Preparing for Economic Armageddon
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Are Lower Gas Prices Good for the Economy?
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2015 Anxiety
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One Emergency Away From Trouble
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End-of-Year Rebalancing
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Lower Natural Gas and Oil Prices
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Social Security
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ReRun (6/4/10): Social Control, Sharing the Wealth, and More Government
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Emergency Preparedness 2012
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