Released April 15, 2024 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With seven months to go before the U.S. presidential election, the economy remains a lingering concern, with gasoline prices supporting resilient consumer-level inflation. Recent polling from the Associated Press-NORC Center for Public Affairs show would-be voters are not impressed with either incumbent President Joe Biden or former President Donald Trump, but for varying reasons.
More than half of the respondents said Trump caused damaged to the democracy, while those opposing Biden expressed concern about illegal immigration and the high cost of living.
The latter remains a lingering concern as the COVID-19 pandemic recedes further in the rear-view mirror. Consumer prices were up 9.1% year-on-year in July 2022 on the back of post-pandemic bottlenecks and soaring demand. Inflation has since moderated, but remains higher than the 2% target rate set by the U.S. Federal Reserve.
Consumer prices were up 3.5% over the 12-month period ending in March. Prices increased 0.4% month-on-month, double the rate from January, and one of the main culprits was retail-level gasoline.
"The index for shelter rose in March, as did the index for gasoline," the Bureau of Labor Statistics reported. "Combined, these two indexes contributed over half of the monthly increase in the index for all items."
Consumer-level gasoline prices averaged $3.63 for a gallon of regular unleaded, relatively unchanged from year-ago levels. But they're a good 25 cents, or 7%, higher than this time last month.
Gasoline prices are a near-ubiquitous reminder of inflationary pressures. The more money that goes into the tank, the less that's used for discretionary spending, the backbone of the U.S. economy.
That makes it something of a political issue, as constituents link the performance of the economy to the performance of the president. John Evans, an analyst at London oil broker PVM, wrote recently that election results hinge on the state of the economy.
Countering supply-side issues stemming from the war in Ukraine and stubborn inflation, Biden early in his term "ended up with little option" than to tap into the Strategic Petroleum Reserves to tame runaway oil prices, he added. Those millions of barrels of extra oil helped reign in crude oil prices from triple-digit levels.
But a renewed geopolitical risk premium is supporting the price of oil, and thereby the price at the pump.
"Relatively low inventories, employment gains, strong household income growth and the prospect of an active hurricane season are expected to keep gasoline consumption high and inventories under pressure," John Kemp, a senior market analyst for the Reuters news service, wrote.
"Ukraine's drone attacks on refineries in Russia threaten to tighten the international supply situation even further and have prompted the Biden administration to warn Ukraine's government to change its targeting," he added.
Much of those events are beyond the control of a single individual. And voters, according to PVM, have exceptionally short memories. Drone strikes on Russian refineries, rebel attacks on Red Sea shipping lanes and fears of an Iranian attack on Western interests have yet to push commodity prices back to levels seen shortly after the pandemic.
Prices are on the rise, but this is not 2022, when regular unleaded hit $5.01 per gallon due to sanctions on Russia. Markets have since adjusted to the post-pandemic reality, even if consumers don't remember $5 gas.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
More than half of the respondents said Trump caused damaged to the democracy, while those opposing Biden expressed concern about illegal immigration and the high cost of living.
The latter remains a lingering concern as the COVID-19 pandemic recedes further in the rear-view mirror. Consumer prices were up 9.1% year-on-year in July 2022 on the back of post-pandemic bottlenecks and soaring demand. Inflation has since moderated, but remains higher than the 2% target rate set by the U.S. Federal Reserve.
Consumer prices were up 3.5% over the 12-month period ending in March. Prices increased 0.4% month-on-month, double the rate from January, and one of the main culprits was retail-level gasoline.
"The index for shelter rose in March, as did the index for gasoline," the Bureau of Labor Statistics reported. "Combined, these two indexes contributed over half of the monthly increase in the index for all items."
Consumer-level gasoline prices averaged $3.63 for a gallon of regular unleaded, relatively unchanged from year-ago levels. But they're a good 25 cents, or 7%, higher than this time last month.
Gasoline prices are a near-ubiquitous reminder of inflationary pressures. The more money that goes into the tank, the less that's used for discretionary spending, the backbone of the U.S. economy.
That makes it something of a political issue, as constituents link the performance of the economy to the performance of the president. John Evans, an analyst at London oil broker PVM, wrote recently that election results hinge on the state of the economy.
Countering supply-side issues stemming from the war in Ukraine and stubborn inflation, Biden early in his term "ended up with little option" than to tap into the Strategic Petroleum Reserves to tame runaway oil prices, he added. Those millions of barrels of extra oil helped reign in crude oil prices from triple-digit levels.
But a renewed geopolitical risk premium is supporting the price of oil, and thereby the price at the pump.
"Relatively low inventories, employment gains, strong household income growth and the prospect of an active hurricane season are expected to keep gasoline consumption high and inventories under pressure," John Kemp, a senior market analyst for the Reuters news service, wrote.
"Ukraine's drone attacks on refineries in Russia threaten to tighten the international supply situation even further and have prompted the Biden administration to warn Ukraine's government to change its targeting," he added.
Much of those events are beyond the control of a single individual. And voters, according to PVM, have exceptionally short memories. Drone strikes on Russian refineries, rebel attacks on Red Sea shipping lanes and fears of an Iranian attack on Western interests have yet to push commodity prices back to levels seen shortly after the pandemic.
Prices are on the rise, but this is not 2022, when regular unleaded hit $5.01 per gallon due to sanctions on Russia. Markets have since adjusted to the post-pandemic reality, even if consumers don't remember $5 gas.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
