Guest Post: Why Is Gasoline Consumption Tanking?

ZeroHedge ^ | 2/10/12 | Tyler Durden

[Kartographer]

The Payoff line in the article:What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession.

If we stipulate that vehicles and fuel consumption are essential proxies for the U.S. economy, then we can expect a steep decline in economic activity to register in other metrics within the next few months.

Such a sharp drop would of course be "unexpected" given the positive employment data of the past few months. But as the data above shows, employment isn't tightly correlated to gasoline consumption: gasoline consumption reflects recession and growth.

In other words, look out below.

[I am Richard Brandon]

Oh ye of little faith. This shows the SUCCESS of the government’s EPA rulings on CAFE standards and electric autos. /sarc

[Chode]

and with the predicted $4.00gal coming this spring, expect it to drop even more...

[PrincessB]

Back in the day (2007-ish) I drove much more than I do now. I’d hit the Target near the Hobby Lobby about 9 miles away. I’d drive over to the Whole Food’s or local grocery if I wanted something interesting. I took day trips on the weekend all around town.

The first time gas hit 3.50, I started eliminating these trips, and adjusting to using stores that are close by, many within walking distance (I even walk to the hair dresser). I started taking regular streets instead of the highway to work, which cut down on mileage and only added five minutes to my commute. I began to think strategically about where I go other than work.

Since then, I haven’t gone back to the old way. When I got a Kindle, I quit trips to books stores and libraries. I have a weekly pilgrimage to our botanical garden which I am thinking of changing to biweekly so I use less gas.

I doubt I am the only person who’s been thinking and acting like this.

[Tai_Chung]

Government’s solution: Raise fuel taxes to make up for the “loss” in revenue.

[Tai_Chung]

Government’s solution: Raise fuel taxes to make up for the “loss” in revenue.

[Renegade]

Consumption tanking and prices going nuts. The gas at my local station went from $3.35/gal. to $3.45 /gal in two days . This even though the price of oil stayed below $100.00 /barrel. Where is the outcry from the public,legislature,and truckers as during the Bush years.The price is much higher now than last year at this time.

[wtd]

Speaking from a personal perspective, back in 2006 our family decided to re-evaluate our vehicle needs which resulted in switching from an Expedition (13mph) to a Matrix(29mph) and a Taurus(20mpg) to an ‘08 Prius(55mph). We consciously eliminated unnecessary trips and cut our fuel vehicle consumption/costs dramatically, despite adding three licensed teens to the mix during that period. As a family we decided we would do all we could to reduce funding ME jizya, and limited our fuel purchases to terror-free oil. Consider also the dramatic rise in online shopping.

[stars & stripes forever]

Low gas consumption is the result of all those electric cars on the road. :)

[joe fonebone]

I will use caps, not for freepers(they already know this) but for those from the opposition that cruise this site....... WE DO NOT HAVE ANY MORE MONEY!!!! WE CANNOT BUY WHAT WE CANNOT AFFORD!!!! VACATIONS, GONE!!!! WEEKEND CRUISING, GONE!!!! GOING OUT ON FRIDAY NITE, GONE!!!!.......we will now resume our regularly scheduled commentary...

[blam]

The Baltic Dry Index Has Crashed - Fred Dunsel (02/10/12)

Too many ships. Shipping rates have collapsed.

[Kartographer]

Unnecessary use of capital letters! You've done it now Mister!

[libertarian27]

Something has to give....

Food prices are way up (as the packages shrink), property taxes are up - fees an assessments are increasing at a nice clip...you got to cut somewhere...combining trips is one of many ways.

I drive around 1,000 miles a week for my job - I see the roads - I see the emptier and emptier roads during daytime work hours...the ‘get out of the house and shop and putz around’ mindset has shifted.

I live on a relatively busy road - Saturday mornings, like right now, in the past would be bustling with ‘here and there’ traffic - it has dwindled a lot, I’ve noticed it for well over a year.

(One thing that might be interesting to track is the percentage drop/gain of traffic congestion during the usual rush hours)

[EGPWS]

Retail gasoline deliveries, already well below 1980 levels,...

Mmmm, after 4 years of Jimma' Carter as POTUS.

Coincidence or just another plan in place to destroy the US economy?

It just must be because of the massive increase in employment that we have experienced lately and those people riding their bicycles to work everyday.

[Galactica]

It is all the Chevy Volts that everyone is buying.

[Oberon]

Well, my family took a full-sized Chevy conversion van out of long-distance service and replaced with a Hyundai Accent. The fuel savings make the car payment.

[autumnraine]

Prices being near to $4 a gallon is going to put a crimp on people buying gas no matter what unemployment is. Put them together and the decline in purchases (less delivery driving needed) is a funnel.

[Seizethecarp]

Thanks for posting this. This drop in gasoline consumption is horrifying, even allowing for the damage that it will do to Obammy’s election prospects!

My son graduates from SMU in May. I suppose I could put him up in a pup-tent in our one bedroom retirement condo...

[darth]

I smell a bubble-bursting deflationary trap.

The markets can be manipulated by the big players who work with the exchanges, big banks, Fed, and other government agencies.

So we have precious metals making highs while the CME LOWERS margin requirements to drive them higher. Gasoline prices go UP while consumption is going DOWN. Stock market goes UP while the Baltic Dry Index crashes.

Private investors have been fleeing the markets and many conservatives have invested in physical precious metals. What if the big players have suckered the rubes into buying that which they can drive down at will?

If the economy declines in a big way, people and companies have to raise cash. They will sell PMs if they have to in order to survive.

Beware! I have long thought we would see a deflationary crash followed by frantic efforts by the Fed to re-inflate that lead to hyperinflation. Don’t trust the big institutions or banks.

[annieokie]

You could add: OUT OF A JOB, NO WHERE TO GO, WITH NO MONEY TO GET THERE.

p.s.: somethimes screaming is the only thing we have left, when we are mad as heII.