Households spend the equivalent of $5,000 per year on gasoline

A woman rides an electric bicycle outside a gas station as current gasoline prices continue to climb near record high territory in Encinitas, California, May 9, 2022.

Mike Blake | Reuters

US households now spend the equivalent of $5,000 a year on gasoline, up from $2,800 a year ago, according to Yardeni Research.

In March, the annual gasoline spending rate was $3,800, Yardeni noted. During the week of May 16, the national retail price of gasoline hit a record high of $4.59 per gallon, the firm noted.

“No wonder the consumer confidence index is so depressed. What’s amazing is that retail sales were so surprisingly strong in April and May,” Yardeni said in a note.

Yardeni said consumers’ inflation-adjusted incomes were barely rising, but they had accumulated a lot of savings and were charging more on credit cards.

But Yardeni said not to bet against the American consumer. “When we’re happy, we spend money. When we’re depressed, we spend even more money!” he said.

April retail sales data, released on Tuesday, was surprisingly strong. Year over year, retail sales rose 8.2% in April.

Gasoline sales actually fell in April from March as prices temporarily fell before hitting record highs in May. Gasoline spending in April jumped nearly 37% from a year ago, according to Commerce Department data.

The price of gasoline was $3.04 a gallon a year ago, according to AAA. This week, the average price topped $4 a gallon in all 50 states, according to AAA data.

The national average on Wednesday was $4.57 a gallon, according to the AAA’s website.

Households spend the equivalent of $5,000 per year on gasoline

Source link Households spend the equivalent of $5,000 per year on gasoline

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