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Behold The "Cheap Gas" Spending Surge: $1 More Per Day
For all the endless media buzz pitching the bullish spin of plunging gas prices, namely that while crude capex spending and energy company earnings are both crashing, high-paying shale jobs are about to suffer pervasive layoffs and energy HY bonds are entering mass default territory leading to who knows what unexpected downstream effects, the average US consumer will spend substantially more to offset all the adverse side-effects of the plunging oil price. Or rather, was supposed to spend more. Because as Gallup finds, this did not happen.
Here is what did happen:
U.S. consumers' average daily spending in December was $98, matching the upper reaches on this measure since 2008. While strong relative to the recent recessionary period, it is similar to the $95 found in November, as well as the $96 in December 2013.
So crude tumbles in half, as does a gallon of gas, and US consumers spend a whopping $2 more in 2014 compared to a year ago, lifting their all in megaspend to an unprecedented $98?
Actually, make that precedented:
Because of holiday shopping, December spending has usually been the highest of any month in Gallup's seven-year history of asking this question. That was not the case in 2014, given that December's $98 average matched the $98 from May, and was barely higher than November's average.
Why?
The lack of a more significant November-to-December increase, common in prior years, could be a sign that the Christmas retail season was less than robust.
Uhm... Say what?
Maybe this only refers to those uber-wealthy Americans for whom spending on gas is such a small piece of the piece that a price reduction there doesn't have much of an impact? Well, there's certainly that: as the following chart shows Americans making more than $90,000 a year picked up their spending to $177 daily in December, but well below the $189 and $190 over the summer, suggesting that as expected, gas prices have no impact on the spending patterns of the wealthy.
So what about the poorer part of US society, those making $90K or less: surely they spent like crazy in December rejoicing in the "tax cut" low gas prices afforded them? Well, no. Because as the next chart shows, the poorer US households spent $85 daily in December.
How does this compare to a year ago? $84. A whopping one dollar increase!
Gallup's take:
Upper-income Americans, those whose household incomes are $90,000 or more a year, had daily spending reports averaging $177 in December, among the highest for this group in 2014, and over the years since the recession. The December average is similar to last December's level. Upper-income spending has shown steady gains since September.
Spending among middle- and lower-income Americans, those whose annual household incomes are less than $90,000, was also higher than that found in most other monthly readings Gallup has conducted in the past several years. However, their spending levels in December 2014 roughly matched those in December 2013. Although spending among upper-income Americans often drives the changes in Gallup's monthly estimate, middle- and lower-income Americans make up the bulk of U.S. consumers.
And it is also the middle- and lower-income Americans that benefited the most from lower gas prices. In other words, the direct impact from the plunging oil price: an unprecedented increase from $84 to $85 between December 2013 and December 2014.
This will boost US GDP by how much again?
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But..... I was able to drive to the Best Buy that was further away, then get it off of Amazon. See?
Thank you Mr. Obama. #WINNING
People are broke, plain and simple
that has never stopped them before
GIVE ME A BREAK!
Gas prices have just barely caught the downward swing of oil and consumers always have a lag when prices drop.
Doom and gloom ONLY because your HFT oil portfolio has been on a downward slide for the past couple of months!
So, PISS OFF!
This is good for MAIN STREET and will pay off if LEFT ALONE!
The $30 saved per fill-up will go directly to ACA premiums, deductibles, and co-pays. It is the best non-insurance money can buy!
About $30?
Spicoli: "Righteous bucks!"
https://www.youtube.com/watch?v=OcwWRenvmlg
So, that buys one year's Ferrari, Aston Martin, et al output.
At the going rate we will be at 5 cents by mid march LOL ,,,,,,,,On a technical basis the 2008-2009 will create a double bottom in dollar terms but we are going to need a very high gold price to compensate right?
The average person drives 16K miles a year.
He gets 20 mpg.
He buys 800 gallons.
As things stand now he will pay $1.75 gallon less in 2015 versus 2014.
The savings for the year is $1,400 per car.
That's meaningful.
except that our electricity rates just went up 37%, property taxes went up, water & sewer went up $65 a month, cable went up, food prices are up, etc. etc.
UPS and Fed Ex RAISED PRICES TODAY!!!!!! Shouldnt they be dropping if its going to last????? So I ask INFLATION OR DEFLATION in dollar terms
Inflation, since they don't count energy or food in CPI.
Oh, I see, if gas was high then everything else would stay down. Good one.
* NC gas tax is going up even though they never took it back down after they raised it because it was $4.00 gas. Rape tax more like it, it's already .37 a gal.
I calculated here in the Midwest with our big trucks my family gas bill will drop $2500 at this rate in 2015 ( lots of ifs and butts).
All of it is going into pm, pb, and chickens.....
No one tell this guy if he'd been driving a smaller car he would have saved $2500 last year too and the year before.
I can only guess based on his comments about buying chickens that he does not live in the city, and he most likely needs the truck to do truck things on his property...a fiat 500 probably would not cut it...
Right on the button. Where I live and go it has to be 4x4 with heavy tow and full 8 foot bed boxes. Power dump trailers and lots of chain saws and skid steerers. Short bed trucks here are give aways that you are an out of towner or some 1%er looking for a hunting trip or trying to diversify a portfolio. Bed liners indicate one is exploring sexuality issues or should have kept the mini van. With diesel dropping I may start buying it instead of making it. It would screw up my barter community but it sure would be nice to work on "other chemistry" projects.
You'd be suprised what you can do with a fiat 500.
Pussies convince themselves they need a silverado.
Your numbers are way off.
Average mileage per driver is 13,475 per the federal highway administration at 24mpg.
That's 561 gallons per year x 1.75 = $982/yr or $82/mo or $20/wk
Besides, 2015 just started, so that's a big assumption that gas prices will continue to go down and stay down. Prices are usually lowest in the winter.
Working age people who have to commute and save average over 15K per year. Old folks drag the average down. Their driving is discretionary.
24 mpg is for new models. The cars on the road are rated lower and get less gas mileage simply because they are no longer new.
So I stand by my figures.
In any case $950 is also meaningful savings.
24 is average city/hwy for all cars on the road
your numbers are probably city mileage only
i wouldn't call it savings when prices were way inflated the past 4 years from QE
"i wouldn't call it savings when prices were way inflated the past 4 years from QE"
I agree about QE and the price of gasoline. It was theft, pure and simple. Nevertheless my 2015 budget for theft will very likely exceed what I actually pay for theft.
I will use the extra money to stimulate the economy by buying crack and whores. These are free market items and I am an ideologue.
Yeah that $1,400 might cover PART of your Half Black Cracker Care increased premiums, or maybe the much higher deductible, but not BOTH.
Yeah, real meaningful.
Ya dope knows everyone's personal situation just listen to him he' smart.
By the way do you swallow?
.
The technical term for that is called slack.
Eventually the new crop of MBA execs will realize that people can't spend if they don't have (a) decent-paying jobs and (b) decent job security.
But by then the old-crop MBA execs will have collected their fortune in bonuses and retired to Easy Street. Scorched Earth Enterprise (SEE). Oh say can you SEE, by the dawn's early light...
Is this a great country, or what?
NO SHIT!
NOBODY HAS ANY MONEY TO SPEND ON CRAP THEY DON'T NEED ANYWAY!
DUHH..
I have a little extra money to spend and my PM dealer appreciates the business.
Gallup says the middle/lower income folks spend ($85/day * 30 days) = $2550/mo, upper income ($177/day * 30 days) = 5,310/mo, and nat'l average for December ($98/day * 30 days) = $2940/mo? SERIOUSLY? Routine expenses for a typical suburbanite are ~$1300/month, including all utilities. If real expenditure is that much higher, where is it all going? Gallup is suggesting that people are spending more than double what ordinary living expenses would dictate AT A NATIONAL LEVEL? BS.
"Routine expenses for a typical suburbanite are ~$1300/month, including all utilities. "
Is there a source for that $1300 / month, or is it just a number you imagined?
You're right. My example is probably quite Atypical.
How much is your mortgage/rent? ObamaCare insurance? Taxes (SS, income, ...)? Other insurance?
NO SHIT!
AGAIN!
"Daily Spending" includes an amount, that in increasingly greater amounts as a % of daily total expenditures, includes PAYMENT BY DEBT (i.e. credit cards, mortgages, HELOC fiat, payday advances, title loans, etc.) of the kind that gives Paul "Debt GOOOOOD" Krugman morning wood.
Energy is huge part of the American budget this really is slicing the baloney pretty thin.
The problem remains too much debt and pretty much zip for recovery.
Go ahead and pay for that with higher taxes. The folks paying for that debt aren't buying.
Move along....
Let's see, we buy about 1,000 gallons a year of gas... so, if the price dropped by about a $1.25, I should have $1,250 that I could waste on useless plastic crap. Except, I don't have an extra $1250 in my pocket b/c inflation in other shit totally sucked it all up, and more. So, "Thankfully" I had that extra $1,250 kicking around, b/c I'd really be up shit creek without it. Thanks, Suadi Arabia. I couldn't have survived the year without you.
You beat me to it, very well put.
A truck driver puts that much fuel in his tank in a week.
This price "correction" (collapse) "saves" 1000 bucks a week.
Of course there is the question of how much debt the trucking company has and whether even an extra 50-100 grand per truck per year is still sufficient. That is real money however...at least until the tax man comes and claims it all.
Again...destroy liquidity (which is what an oil price collapse in fact means) and "buyer beware" of any other Faux Liquid "credits" (meaning debt.)
Equities are the most liquid thing out there. That would be the least of my worries. Folks going hog wild in "high yield" strike me as a very predictable problem however. Already Linn Energy et al are slashing their dividend to ZERO. What about REIT's and MLP's is my question?
Exxon/Mobil looks great to me in this environment. Who demands less oil when the price collapses? Certainly not the Government...
ANY Government actually....
I guess it depends on if the truck uses diesel or gas. Deisel prices are still north of $3/gallon.
http://www.eia.gov/petroleum/gasdiesel/
It's all handled with fuel surcharges which are updated regularily.
Depending on your age and kids, it probably went to healthcare...net nothing
madcows:
The 'average' driver puts about 12k miles on their car/year.
At an 'average' mileage of 23 mpg, that's ~520 gallons per year, for a total savings (at $1.25/gal) of $650.
Congratulations! You nearly covered your $695 Obamacare Flat Tax Penalty for next year!!!
http://www.healthinsurance.org/obamacare/obamacare-penalty-calculator/
Do these DUMB FUCKS not realize that the average Joe will take the extra coin to pay for stuff that has INCREASED in cost since last year? What a bunch of dumb f-ing heebs. J6P has not a pot to piss in when it comes to spending anything "extra".
Sure, I'm glad my monthly has bill is smaller but it barely offsets the damn increase from our utility supplier.
Take away credit cards and price at the pump would be .44 cents. People have no cash left !!!!
I pulled out cash to buy a gift certificate at a swanky store last month and the clerk looked at me like I had pulled a live ferret out of my pants. She said she almost never sees cash anymore.
CASH!?!? That's suspicious enough to warrant a call to Homeland's 'see something, say something' hot line.
Seriously... just TRY to pay for a hotel room or airline ticket with cash these days....
Yeah! Gas now 50% lower while beef is 50% higher??? Gas now saves you $20 for a weekend trip -- but hotels have raised prices by $20??? Gas is now saving you $80 a month -- but the car repair place now has to pay for Obamacare - so those car repairs and tires now cost you $80 more than they did a year ago??? Where is the GDP boost!
Spending up $1 a day -- or in other words -- about the same as the average increase in take home pay!!!
i saved 20 this weekend filling both vehicles. bought two rib eyes for 20.
stayed home and grilled them and they were fucking delicious...
almost as good as the venison chops, ha...
Anybody else here watching the 10 year? Holy shit.
triple top. ready to bust thru to the other side.
refi tyme coming?
gas at 2 and mort two hundred lower.
fellin rich, bitcheez!
It might look as deflation but never ever did a reserve currency implode because of inflation.
It always ended in massive or hyperinflation. Always.
And as even the bigger oil player are planning to cut production, it will take quite a while to bring it back online.
And for the smaller players with debt who are smart enough to go offline, they’ll be offline much longer as they’ll need to find financing to restart and after this crash there won’t be to many lenders.
So enjoy these prices as every day is the last bargain.
Weimar Germany was doing a boom business selling bonds to foreign buyers right before all hell broke loose. The rest of the world said Germany was recovering and had a STRONG economy. sound familiar?
The reality is just before hyperinflation occurs you see DEFLATION in the cost of things you DON'T need while the cost of the things you DO need is increasing. Funny how gov has rigged CPI stats to reduce reported inflation. I don't give a damn how much less a toaster costs when the price of bread has gone up 50%.
Cheap oil is temporary and pretty meaningless. Fuel oil is still more than 4x what it was when I bought my house. The thermostat stays down and radiators are tuned off in rooms that aren't being used.
um, so if "spending" increased by about $1 per day, and gas fell by about $1.25 a gallon, and the average family uses a gal per day, then inflation was about $2.25 per day, at least. Nah, sumtin' ain't right. Inflation is more like 6-7%
Wanna go for a ride?
https://www.youtube.com/watch?v=NBkjcvNztKQ
A whole dollar a day. Wow! I can upgrade from eating possum road pizza to pink slime with that kind of big money.
They could give gasoline away free, and I'd still be in the red after the reaming the Affordable Care Act has done to my finances. Over the next couple of weeks, I'll be deciding which services I'm eliminating from some fine companies that I'd otherwise keep in order to ameliorate what the ACA has done.
Multiply me by scores of millions of dumb-asses who actually try to be productive.
Shell game, that's all it is.
Glad to be wayyyyyyy below average on this one. Fuck feeding this bullshit economy.
As leftist states hurry to increase fuel taxes because fuel is now less expensive (but still double what it was about six years ago).
Aye holes.
$1 a day...that would be TWO value meals at McDonalds every day...windfall booyah....
I gotta think a few more new SUVs and pickups are selling at the dealers. Just a hunch.
Right! Those dealers are ready to multiply that dollar a day with financing using all the latest gimmicks and tech. After all, the banks use up to a 60x multiplier. Roll out the Rolls!
Lower paychecks/less hours for many... gas savings is getting pushed over to paying off bills, not buying more icrap. I can't speak for all but my next fill up savings may just buy my family some food.
Cheap energy is good for the Chinese economy.
That one dollar a day fell short of the price increase I got from paying for undocumented aliens health insurance. They'll have to drop the price some more. There is no EXTRA money, just less NEGATIVE money.
Grass, Cash or Ass nobody rides for free :-) Keep on Truckin Baby.
Still waiting to see these sub $2.00 per gallon prices that are being reported in the MM. Lowest price that I have seen regular unleaded for is $2.39 9/10 I am guessing that the sub $2.00 price that is being reported is prior to the gasoline tax that is levied by just about every state and or locality.
I just came back from Georgia last week, spending a few days in Savannah. Gas was just under $2.00 in a few places. They are still playing the weekend pricing game, kicking it up about $0.15 or so a gallon.
Paid 1.83 about an hour ago south end of Dallas.
So I didn't spend more either. Some call me cheap, some call me frugal, some even say "Son, you're crazy.". But I'm preparing for the worst Global Depression in decades...very long painful and perhaps very very violent.
fill up the gas tank
get a free ounce or 2 of silver...
Somehow these precious metal bugs can't figure that out. They'd rather bitch than stack a little more.
Well, we were down to $1.96/gal here in the ol'KY. Not the lube the state. It has since gone back above.
The $85 per day is supposed to exclude things like rent/mortgage, taxes, insurance, and other debt repayment. Which is impossible for the majority of Americans to spend without significantly adding to their overall debt.
$85 per day is $31k per year. If 75% of America makes less than $35k a year then it is pretty much impossible to spend $31k on stuff outside base expenses. Unless the $31k goes on a credit card.
I used to try and limit my spending outside base expenses to $30 a day. It is almost impossible to do that now. $1400 goes to car and rent. Another $250 goes to debts, $650 goes to insurances. Other bills range from $200-350. My after tax income is $4200 a month. I have between $1500-1700 per month to pay for food, entertainment, etc which is just over $50 a day.
Based on my income I can spend a max of $133 per day without accumulating additional debt. That includes paying for all my other bills. There is no way I can spend $85 per day on clothes, restaurants, entertainment, and consumer goods and I make much more than the average American.
This Gallup poll must be based on average EBT expenditures. Perhaps the free shit army can spend that much since their base expenditures like rent, heat, electricity, cable, phone, and internet are almost nill since they are all massively subsidized. Once again, why the hell is anyone working?
RUN FOR YOUR LIVES!
Im long truck drivers and short Houston strip clubs and real estate
So this should include energy. But if energy costs so much less and the consumer spending increases, then an even bigger part of the spending is flowing into the other segments of the economy which is good for them.
Therefore I cannot see how the numbers can be interpreted as negative.
Just finished biz for the day. We paid property tax and insurance on 2 homes today. I'm pretty sure that ate up any fuel savings money for the year.
Did everyone remember to fill in their monthly spending reports?
I don't have much work any longer. No gubmint pension. And I'm white so no EBT or disability for me either. I'm scraping by, and so far have stayed current on property tax so the house is safe.
Doesn't matter to me how low gas prices go, I don't have any money to pay for it regardless of price, so I don't make the trip. Sure I appreciate it only costing $50 to fill the tank in my 25 year old pick up, instead of the $85 it took at this time last year, but I only fill it once a month now at the most.A year ago was 3-4 times a month.
So even if gas cost a buck, I'd still be using less of it than when I had steady work. So I have no "savings" to spend, because I have no earnings in the first place.
I can't think of one other commodity out there for which demand is more inelastic than oil, and yet am supposed to buy the mainstream spiel that demand has suddenly dropped so much as to half the price
One more price fixed commodity I think
What's better for the economy is not better for me. What's better for me is not better for the economy.
OK.....and?
This drop in energy prices is a fairly recent occurence and will take time for other consumer goods related to oil to drop. Further, this is still great news for consumers like me.
Get over it.