Forget the need for a U.S. carbon tax – the economy has put a big dent in gasoline use and driving

UPDATED: see below

A few days ago I did a report on the U.S. Energy Information Administration (EIA) numbers for carbon dioxide emissions, showing that it was clearly down, and back to levels not seen since 1994, and noting that since Kyoto in 1997, U.S. emissions have dropped even though Kyoto was never ratified in the USA.

kyoto_met_1997-2012

If you thought that was troubling and strange have a look at these numbers which also indicate the state of the U.S. Economy. First, the number of miles driven monthly for the last 30 years. As you can see, just like global temperature has flatlined, so has the number of miles driven.

US_miles

Source data: http://research.stlouisfed.org/fred2/series/M12MTVUSM227NFWA

Now the amount of gasoline sold. Note the regular seasonal “heartbeat” pattern up to about 2008, then that pattern gives way to a precipitous drop at the end.

US_gasoline_sales

Source data: http://www.eia.gov/dnav/pet/hist_xls/A103600001m.xls

If that doesn’t paint a grim picture of the U.S. economy, I don’t know what will.

Zerohedge writes:

…but the biggest question we have is just how did the biggest boost in energy and engine efficiency occurred at two key junctions: Just after the Lehman Failure, and just after the US downgrade and the first debt ceiling crisis, when the total sales of gasoline by US retailers literally went off the charts, and which data series is now languishing at levels not seen since the 1970s (unfortunately we can only estimate: not even the EIA’s data set goes back that far).

Perhaps, just perhaps, Occam’s razor applies in this situation as well, and the collapse in energy demand in the US has little to do with MPG efficiency, higher productivity, and throughput mysteriously achieved just when the entire economy was imploding in the months after the Lehman failure, and despite the re-emerging proliferation of cheap Fed debt funded SUVs and small trucks, and everything to do with the US consumer being slowly but surely tapped out?

US_gasoline_sales_econ

Of course, if that is the case, than the US economy is far, far weaker than even we could have surmised, although it certainly would explain the desperation with which the Fed is doing everything in its power to preserve the levitation of the S&P, i.e., the confidence that all is well despite all signs to the contrary. Because should the market finally be allowed to reflect the underlying economy – not the administration represented economy, but the real one – then everything that has transpired in the past five years will be child’s play compared to what’s coming.

I wonder if that brilliant economist of the NYT, Paul Krugman, can pull the wool out of his eyes long enough to comprehend this?

h/t to Kate at Small Dead Animals for getting me interested in this enough to plot the data myself to see if it was true.

UPDATE: I added this is response to comments about the number of miles not dropping as fast. “jeez” points out that miles driven are an estimate from surveys.

If people are driving less miles, we have less consumption, and that would mean excess supply and lower prices. Lower prices should then result in more people driving more, sort of a self correcting feedback.

Instead what we have is a 50% drop in retail sales of gasoline during a period of reduced driving.

That says to me that many people have just stopped buying gas. Consider that 90 million people are now out of the workforce. Look at this graph and that helps explain part of what we are seeing.

UPDATE: Correction. From this comment, I agree, the Zerohedge article focus on retail sales is misleading, see new plot I did below. I’m not privy to the vagaries of gasoline supply/sales channels, and had I been, this would have raised more suspicions. Thanks to WUWT readers for the peer review!  – Anthony

Chad says:

Anthony,
As a few others have mentioned, the bug is in “retail sales by refiners.” There has of course been wholesale in the past to off-brand distributers (i.e. 7-11 selling gasoline that they sure don’t refine) compared to Exxon selling Exxon refined gasoline. At those drop-off points what likely happened is that fewer people were willing to spend a few extra pennies stopping at Exxon, and now buy their gas at Wal-Mart or Kroger when they do their grocery shopping.
The fact that
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M
http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_5.pdf
both align with the CO2 and other data (like total petroleum consumption) makes it much more reasonable to think there has been a ~10% decline in gasoline purchases than a 50% decline. Otherwise we would have to ask how we cut 25% of our Carbon use (petroleum is ~1/2 of our carbon use, and a 50% decline in that would be a total of 25% of all carbon) while only decreasing carbon emissions by ~10%.

(Note: To test this I plotted the EIA data below from here: http://www.eia.gov/dnav/pet/hist_xls/MGFUPUS1m.xls   – Anthony)

US_gasoline_BBL_1993-2013
A 10% decline would then be appropriately explained by 4% decline in labor, increases in fuel efficiency, and smaller factors like online shopping (remember, somebody still drives it to your house – and usually they leave a large truck idiling while they walk the package up and have you sign). A 10% drop is still a huge amount of gas, but it is not the same as a total societal collapse that a 50% drop in 4 years would indicate.

I assume this was probably an honest mistake, but since it has been pointed out several times I think the most honest thing to do is change the data set and correct the article.

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156 thoughts on “Forget the need for a U.S. carbon tax – the economy has put a big dent in gasoline use and driving

  1. Something seems funny here, at least to me. I would have assumed that the number of miles driven and the number of gallons of gasoline sold would be proportional, save for an adjustment that reflects the long-term improvement in average fuel economy over time. But these plots seem do not bear that out. Since 2008, the number of miles driven has interrupted its upward trend and flatlined, while the amount of gasoline sold has decreased by a factor of 2. What am I missing?

  2. How are we driving in miles at approx 2004 levels but buying half the gas? Something doesn’t look right.

  3. The number of miles driven might have dropped because more business is done online.

    My business partners and clients, I hardly speak to them anymore – when I’m not typing into skype or phoning them, emailing them, directing them to look at web presentations I’ve prepared, I’m usually asking them to download something.

    With all the new productivity tools which have arisen over the last decade, you barely have to get out of bed in the morning to have your business at your fingertips – in fact, on days when I sleep with my phone under my pillow, so I can take support calls, I don’t.

  4. 1) I really dislike graphs that aren’t based at 0.

    2) @MDR the collapse of trucking and SUVs? That would bring down gallons faster than miles driven. Though looking at the data it’s “retail” gas, not wholesale, so I suspect the sample isn’t quite the same. The zerohedge post goes more into detail.

  5. MDR says:
    April 9, 2013 at 9:35 pm
    But these plots seem do not bear that out. Since 2008, the number of miles driven has interrupted its upward trend and flatlined, while the amount of gasoline sold has decreased by a factor of 2. What am I missing?

    This is just an educated guess on my part. But could it be that places like Los Angeles has fewer cars on the road so less time is spent in traffic jams and more of the gasoline is actually used to drive instead of idling?

  6. CO2 tax is not the Tax per say, it’s about control. Picking winners and losers and rent seekers.

  7. MDR

    One quantity is easy to measure. Fuel producers KNOW how much gasoline they sell.

    Miles driven can only be vaguely estimated from surveys (until every vehicle is tracked-coming soon.)

    • @jeez if people are driving less miles, we have less consumption, and that would mean excess supply and lower prices. Lower prices should then result in more people driving more, sort of a self correcting feedback.

      Instead what we have is a 50% drop in retail sales of gasoline during a period of reduced driving.

      That says to me that many people have just stopped buying gas. Consider that 90 million people are now out of the workforce. Look at this graph and that helps explain part of what we are seeing.

  8. I have to agree with jeez above. Miles traveled/retail sales cannot be reconciled.

    This is staggering. Halving retail sales goes way beyond economic issues.

    It says societal collapse.

  9. Just talked to a statesider. He asks:

    1. Do the numbers measure pure gasoline or do they include gasoline cut with ethanol?

    2. Do the trends take into consideration the increased use of natural gas?

    3. To what extent are the fuel efficiencies mandated by state laws such as California taken into consideration?

  10. It looks like reformulated is included in these numbers

    http://www.eia.gov/dnav/pet/pet_cons_refmg_d_nus_VTR_mgalpd_m.htm

    Each of the tabs on this link show different cuts of the data, refiner owned, wholesale sales, etc. In Jan 2013 looks like they sold 27 Million gals….the lowest monthly since…well, this chart only goes back to 1983

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=a103600001&f=m

    boy, i bet they are *really* happy they realigned into the chips and soda business.

  11. Anthony, it maybe doesn’t change the shape of the curve much but, unless my reading glasses are letting me down, or there’s something I don’t understand about “sales by refiners”, the y-axis numbers are off by a factor of 10. Total annual US consumption topped out at 140 Billion gallons in 2007, so a daily average would be 1/365 of that, or around 10X of the y-axis numbers.

    http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10

  12. @ JC, correct. The US economy is collapsing in slow motion. Why else would we see 40% of the normally working population NOT WORKING. Get a clue – record levels of US sovereign debt (17 trillion), record levels of people on food stamps, record levels of people taking early social security, record levels of people on disability, record levels of people at poverty levels, record levels of homes foreclosed, record low levels of home sales and new home construction…the list goes on and we are just waiting for the other shoe to drop.

    The second the Fed stops pumping money or the interest rates start rising the fat lady will be taking a deep breath. If something can not continue to go on — it won’t.

  13. PS to my above post:

    Maybe refineries are a fraction when also adding in:

    “blending plants, pipelines, and bulk terminals.”

  14. J Barber says:
    April 9, 2013 at 10:58 pm

    But overall US retail sales have increased by 9.58% over the last two years: http://ycharts.com/indicators/retail_sales/chart#series=type%3Aindicator%2Cid%3Aretail_sales%2Ccalc%3A&format=indexed&recessions=false&zoom=5&startDate=&endDate= . Could it be that people no longer drive to Walmart because they order what they want on line and wait for it to be delivered?
    *************************************************************************************************
    Or the figures are fudged???

  15. I don’t believe there are less miles driven in my area. I’m always astounded at the constant high level of traffic all day, every day. The roads are packed at all times, especially midafternoon during the week when a fraction of people are supposedly at work.

    I live on a small side street that serves a community of a couple dozen homes. The road would not really be used as through traffic. And yet every day, all day (even just now and it’s 2:15am ! ) a car goes past on average every 3-5 minutes. Where is everybody going all the time? The same cars go up and down past the house all day , every day. It’s worst when the weather is nice and sunny. I’ve definitely noticed that temperature increase is correlated with a dramatic increase in traffic.

  16. There is still something funny about the original two plots.

    I still don’t know exactly what I am looking at, and consequently I think the analysis about the degree to which the labor market influences these numbers is premature.

    As Chris [April 9, 2013 at 9:41 pm] stated succinctly: How are we driving in miles at approx 2004 levels but buying half the gas?

    As philincalifornia [April 9, 2013 at 10:43 pm] stated: The y-axis numbers [in the "total sales by refineries" plot] are off by a factor of 10.

    My take on Chris: Fuel efficiency hasn’t improved that much in 9 years, and the amount of transportation fueled by CNG or electric remains miniscule in comparison to gasoline powered vehicles and thus cannot not account for much of the 50% drop. It’s possible the survey of miles driven is at fault.

    My take on phil: But that leaves the other plot, and total sales by refineries would seem to be easier to measure [and thus more accurately measured] than miles driven. However: Given that phil’s link states off the top that in 2011 the US consumed “a daily average of about 367.08 million gallons” of gasoline [side note: are 5 significant figures really necessary?], this does not match the daily numbers plotted in the post, as phil mentioned. Yes, I know the table says monthly, but that refers to the sampling [of once per month] and not to the consumption rate divisor [which is per day]. This is verified by the first link given by rk [April 9, 2013 at 10:38 pm], where the exact same data are provided in the “1983-2013″ link in the “motor gasoline” row of the table, down to all of the wiggles, in which the units are clearly “thousand gallons per day”, i.e. same units as the plot in the original post. That, in turn, causes me to wonder whether the total refinery sales plot is measuring some subset of the total amount of gasoline used for transportation, since it’s so much lower than the aforementioned 367.08 million gallon figure, and thus we are not being provided with the complete picture. I can’t find any indication of what this is actually plotted on the various source webpages right now, though, so I’m at a loss, especially since “gasoline” is fairly specific and primarily used for transportation in the US [though it is also used in agriculture as well].

    Bottom line: Something still seems funny here.

  17. Total miles are down but seem to have stabilized; vehicle miles includes trucks and buses; they generally burn diesel. Do you have any historical usage curves for diesel? Any historical data on the split of total miles between diesel and gasoline? If the proportion of gasoline miles to diesel miles is basically unchanged and total miles is flat then it would seem reasonable to attribute declining gasoline sales/usage to improved overall gasoline engine performance.

  18. We know its all a money making scam! One volcano, just one gives out more CO2 than whole of mankind’s existence?
    Money-making scams:
    Y2K virus………biggest BS ever and millions made out of it
    CFC’s……..favours US export and companies
    Ozone depletion………BS
    AGW…….trillions made of it
    CO2……..millions made if not trillions
    Peak-Oil (fossil oil)…….crude price control all BS anybody heard of A-biotic oil? Must have been a lot of dinosaurs on Titan then…oceans of hydro-carbons!
    And many more to come……………

  19. From 1978 to the present I am sure the US population has grown so even though the workforce participation RATE has fallen from a peak of 67% to 63% now the actual NUMBER of people working has probably increased so the participation RATE cannot be taken as a proxy for petrol use.

    REPLY:your “probably” argument doesn’t cut it here, show some data – Anthony

  20. The statistics does not include all motor gasoline sold. You can find the total numbers here:

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M

    As you can see it is four times bigger than the retail sales by refineries

    I have also done some basic math to check:
    The retail sale from the first link (retail sales by refinereies) is 62 M Gal/day in 2000. The other link (Total supplied motor gasoline) is 220 M Gal/day
    If you divide these numbers with the approximately 250 M cars in the US you get a more reasonable figure from the latter statistics.

  21. The greens are cheering though.

    Deindustrialization is what they preach; depopulation is what they want. People should be alarmed by the lack of growth of the economy, yet they are alarmed by non-existing warming…

  22. @Steve B — or the currency has been inflated by over 25% and the 10% increase equals at least a 15% drop in actual sales volume. My own calcs have shown purchase price for a 2 year old low mileage car has risen over by 30% in 2 years. That is simply a function of the inflating currency. Do the math on the unit price of gas and see what you get !!

    The Bernank is printing over a trillion a year, atm

  23. I think Electricy consumption would tell you far more about the overall state of the nation. Lower consumption could reflect less manufacturing or reduced home energy use or combinations of the two. Your population has increasedover time so has electricity generation increased proportionately or has it lessened?

  24. Anthony,

    You say, “Consider that 90 million people are now out of the workforce.” The entire US workforce has never been over 156 million. How can that be?

    While gasoline demand has plunged, during the same period US GDP has grown by 1.2 Trillion dollars. Up over 8%.

    JP

  25. So now the question is why have refineries’ sales of gasoline gone down by half? I know a few big refiners went out of business recently so that would account for some, but half?? And who is picking up the slack? Is the US importing refined gasoline now?

  26. Instead what we have is a 50% drop in retail sales of gasoline during a period of reduced driving

    That says that oblarny has succeeded. These 2 together can mean only one thing, Price hike.

  27. Miles traveled is presented by the Federal Reserve Bank of St. Louis. The Federal Reserve has individual banks in different regions of the US, since different regions have differing economic outputs and will respond differently to the macro economy. The individual banks then report to the central Fed. The reporting of the mileage is only for that region. That should explain the difference.

    Now guess where incomes have not stagnated but, instead gone up; where home values never declined with the collapse of the housing market and, in fact, are still appreciating; and, finally, where unemployment is about the lowest in the country by a significant margin. Washington and the surrounding metro area.

    Hope & Change!

  28. Anthony, forgive my failure to provide US population numbers. I thought my point about the RATE of workforce participation was self-evident!

    The population of the USA rose from 225m in 1979 to 282m in 2000 and to 314m in 2012 according to data given here http://www.google.co.uk/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=country:US&dl=en&hl=en&q=population%20of%20usa

    So, a drop in workforce participation from its peak of 67.3% in 2000 to 63.3% in 2012 STILL results in an actual INCREASE in the workforce from 189.79million to 198.76million

    I repeat, you cannot use the reduction in the RATE of workforce participation as a proxy for the use of gasoline (or petrol as we call it in the UK). Sorry.

  29. More importantly what is the trend in trucking miles ? The delivery of goods and materials is a strong indicator of economic health … if that is reducing then fewer goods are being delivered and less material being consumed … which means that private (retail) consumption is down and manufacturing is down … BAD BAD BAD !!!

  30. Maybe that graph only tells part of the story as it only shows retail sales by refineries. So it does not include imported gasoline nor any blending (is it 10% ethanol now?).
    Also what about diesel – has its use grown significantly? In the UK petrol (as we call it) sales are down markedly but diesel is up a bit.

  31. The chart only shows gasoline. Could the explanation be as simple as that people who drive a lot of miles are now buying Diesel cars? this would show up as a decline in gasoline but there should be an uptick in diesel but not as big as diesel uses 5 liter per kilometer and gasoline consumes 7-10 liter per kilometer.

  32. marchesarosa says: April 10, 2013 at 1:30 am
    Anthony, forgive my failure to provide US population numbers. I thought my point about the RATE of workforce participation was self-evident!
    The population of the USA rose from 225m in 1979 to 282m in 2000 and to 314m in 2012 according to data [ ... ]
    So, a drop in workforce participation from its peak of 67.3% in 2000 to 63.3% in 2012 STILL results in an actual INCREASE in the workforce from 189.79million to 198.76million
    —————–
    Population has increased by over 11% but participation has reduced by ~4% … the economy has failed to keep up with creating sufficient jobs for its increasing population. Employment will naturally grow with an increasing population but this is not a result of increased prosperity which fuels consumption. Essentially, net unemployment has increased and this is reflected in a drop in consumption of gasoline.

  33. BioBob (April 9, 2013 at 10:45 pm) said: “The second the Fed stops pumping money or the interest rates start rising the fat lady will be taking a deep breath. If something can not continue to go on — it won’t.”

    The Fed won’t stop. They are now printing money to give directly to politicians to spend. There is almost zero political will to stop the Fed, most people don’t have the faintest grasp of the seriousness of the situation. As long as the Fed prints we have no way to grow out of debt (personal and government) because investors cannot commit money for long terms to get big boosts in productivity. We are all speculators now even if we believe we are buying and holding. Companies speculate on our behalf using simple carry trades or more complex investment fads. Even China’s productivity growth is tapped out and our Fed mostly exports inflation to places like that. The bottom line is that a hollow economy has less need for gasoline to commute to better jobs because there are few better jobs.

  34. Hmm. I thought the main “driver” for reduced CO2 emissions in the US was the shift from coal to (shale) gas?

  35. I’m trading my truck for a gas-sipper at the end of the month. I’ll be using about 40% less gasoline after the switch. Someone with the initials of Anthony Watts drives an electric car and is certainly not putting much coin in the pockets of big oil.

    Anecdotal evidence, sure, but what percent of the drop in usage has nothing to do with the general economy and everything to do with people being tight with a buck? Hard to measure, I’m sure.

  36. Scary charts … looks like we’re becoming the land of the hungry and the home of the unemployed.

  37. It is amazing what an increase in unemployment and lowering of living standard will do. Well done Obama!(?)
    Time for change i think.

  38. I really question the 50% reduction number. I just don’t see 50% fewer people on the road or at the gas station. I highly suspect that number. Also, 90million people out of work? Come on, that’s 1/4 of the US population. Unemployment is not at 25%…..

  39. Streetcred informs us that
    “the economy has failed to keep up with creating sufficient jobs for its increasing population”.

    “Who knew”! The West has been in recession!

    This still does not alter the fact that more people are economically active in the USA now than in 2000. The falling RATE of workforce participation in that period is not a proxy for gasoline use.

  40. I drive 100 miles a day less since I have been telecommuting. Also, I have been driving to Boston for medical reasons and I have noticed that traffic is less bad than when I lived there 20 years ago.

  41. I too am having problems reading this. Is it intentional that the 3rd and 4th graphs appear to be identical except that the 4th has the Lehman bank failure and the US credit downgrade marked?

  42. …more people are economically active in the USA now than in 2000. The falling RATE of workforce participation in that period is not a proxy for gasoline use…

    In fact, the graph showing monthly mileage confirms a substantial overall increase from 2000 (when the rate of workforce participation began to fall) to 2012 and only a relatively small reduction in mileage since 2008.

    There is indeed a lack of congruence between the various measures given in this thread.

  43. The carbon tax means different things to different people. To the faithful, it means a way to penalize living, and to get rich. To the government bureaucrats (not to be confused with politicians) it is a way to increase revenue when the very term “tax” is an anathema to the populace.

    So CO2 is down due to the continuing recession. But that means gas tax revenue is down as well. So states are coming up with some innovated ways to try to recoup the loss of revenue in order to feed their hungry bureaucrats.

    In this state they have the “anti-” carbon tax. It is a fee assessed on all hybrid cars in order to pay for the roads they drive on.

    So “need” is a subjective term. Governments “need” taxes, and the carbon tax is not dead, just hibernating. It will be repackaged, called something else and trotted out again as gas revenues continue to fall (due to CAFE standards among other things).

  44. I don’t get this chart: “U.S. Product Supplied of Finished Gasoline” as it doesn’t match any of the other data online. Where is all that finished gas going (hard to believe that it is all in inventory)??:

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M

    Although the amounts of finished gasoline exported have increased dramatically (from ~3 million to ~16 million barrels monthly) this does not make up for the above ref.:

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS2&f=M

    And imports of gasoline match the drop shown in article:

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wgtimus2&f=4

  45. See the changing US unemployment RATE here

    http://www.google.co.uk/publicdata/explore?ds=z1ebjpgk2654c1_&met_y=unemployment_rate&idim=country:US&fdim_y=seasonality:S&dl=en&hl=en&q=unemployment%20rate%20usa

    This, too, only makes sense if it is standardised for the growing number in the potentially economically active age group over time.

    “As part of the economic policy of Barack Obama, the United States Congress funded approximately $800 billion in spending and tax cuts via the February 2009 American Recovery and Reinvestment Act to stimulate the economy. Monthly job losses began slowing shortly thereafter. By March 2010, employment again began to rise. From March 2010 to September 2012, over 4.3 million jobs were added, with 24 consecutive months of employment increases from October 2010 to September 2012. As of September 2012, employment of 133.5 million remained 4.5 million below the pre-crisis peak in January 2008.[139]

    http://en.wikipedia.org/wiki/Unemployment_in_the_United_States#Demographics

  46. “While gasoline demand has plunged, during the same period US GDP has grown by 1.2 Trillion dollars. Up over 8%.”

    GDP includes government spending so is not a reliable indicator of how an economy is actually doing. When the feds waste trillions on various bailouts and green energy schemes, this goes into GDP and looks like the economy is doing fine. But, if most of the money was wasted and only lined the pockets of a relatively few crony-capito-socialists, it really did little for the economy and the ordinary citizen, except perhaps raise their taxes at some point.

  47. @ John Parsons says: April 10, 2013 at 12:02 am

    2 things to consider:
    #1 – There have always been those out of the workforce. For one reason or another (retirement, raising children, unemployment). So the total workforce aged population continues to grow, but the workforce does not. That is how 90m are now out of the workforce. it does not mean 90m left yesterday, only that the number has grown disproportionately to the workforce participation in the last 5 years.

    #2 – What is the GNP up? And of that 8% (which includes government spending which we know has increased by over $1t in that time period – via the stimulus alone), how much is inflation? Subtract the $1t from the $1.2t and that leaves? not much.

  48. Random thoughts

    I am a school teacher. We keep getting our budget cut yet our student population grows. That means less taxes are being collected relative to the population (population grows but the same amount of cash available per capita is not keeping up). Yes, we get more money each year, but we are spending less per student. Our retirement system isn’t nearly what it once was and is being cut again. Yes it gets more money each year but individually that system is slowly paying out less and less per person each year.

    So somewhere in this population growth the entire world is experiencing and will continue to experience, there is less cash available for each person. Less cash coming in, less cash going out. If more people are working but each person is getting less and less cash each year for their work, the ability to go out and spend at previous levels is decreasing.

    However, this begs the question: Were we over-indulging ourselves in the past when cash was available? And was the manufacturing community willing to feed our desires? A good life does not mean buying a new washer every 4 years. It means buying a good one that lasts 20 years. However, if we return to a time when such purchases lasted a long time, we would soon see a growing poverty stricken population.

    It’s a conundrum for sure.

  49. Maybe all the millions of federal workers around DC are now walking the 100 yards to the nearest lunchtime cafe instead of driving, or, gasp, packing lunches.

  50. An anecdote; I drive 10 y.o. 50 mpg diesel VW TDI, ATM with two really nice bikes folded into the back (a BikeFriday NWT and my ICE Trike Sprint 26). On our way to bicycle in SC, escaping late snows in Wisconsin (an inch is forecast for today).

    We are not in the job market. Simpleton economists say ‘a rising tide floats all boats.’ Our boats are aground, with an inflationary hole in their bottoms, the water is chest high and rising. Only a reduction in the cost of living benefits all.

  51. dbstealey says:April 10, 2013 at 4:48 am

    Although there is no metric, bartering is way up. The greater the obamanation, the greater the underground market. Not a good trend for a ‘tax-it-to-survivalist’.

  52. Petrolhead: …diesel uses 5 liter per kilometer and gasoline consumes 7-10 liter per kilometer.
    Man, what are you driving? That figures out to about 2 gallons per mile.

  53. “the economy has failed to keep up with creating sufficient jobs for its increasing population.”
    Maybe. Or maybe not. As population grows, there are more people to create wealth, such as by growing food, and more people seeking to consume stuff, such as food.
    There is nowhere in economic theory, outside of Malthus, that a population can get too big to function.
    It just doesn’t make sense. The only way that argument makes sense is if there are limited essential resources that are unavaiable, either by being tightly controlled (as the AGW crowd wants to do with global cap and trade), or the resource simply runs out – which is far-fetched at this point for just abt every good or service, since rarity of things such as lithium for batteries would drive alternatives to be favored.

  54. A drop in workforce participation rate does NOT equal an increase in unemployment, or even necessarily a poor economy. I suspect that the current drop in participation rate is due to baby boomers retiring. This drops the participation rate, but does not increase unemployment.
    In a poor economy, the participation rate may actually increase, as there would be fewer stay at home moms, and more students working rather than relying on parental support etc.
    I would expect a good, expanding ecomomy may drop participation as these factors reverse, and there are more single income households.

  55. Steve Keohane says: April 10, 2013 at 5:41 am “Although there is no metric, bartering is way up.”

    Bitcoin BTC _virtual_currency_ value doubled within the last two weeks, from ~USD100 to ~USD200 yesterday. I am disappointed in myself for not understanding enough, being computer literate enough to be able to install a trustworthy BTC client and backup.

  56. I agree the economy is in much worse shape than we are told, and that inflation is higher than reported. WIth such a drop in gasoline consumption, how can gas prices still be so high? Leverage… Easy money from the Fed keeps stocks and commodities bid high. Who wouldn’t speculate with free money if they could? Every time the Fed announces more QE, gas prices surge.

    That being said, I will order something off of Amazon simply to avoid making a stop on the way home. I am on a computer most of the weekday hours I’m awake, and I like it that way.

  57. Anthony, Mods: You need to go to the link posted here:
    ScottR says:
    April 9, 2013 at 9:51 pm

    Download the excel sheet and plot column S “U.S. Product Supplied of Finished Motor Gasoline (Thousand Barrels)”

    Notice that it is the sum of columns T (reformulated) and U (conventional).

    That is the real data and it matches more reasonably with the miles driven estimate.

    I think maybe the data in your chart being “Retail sales by refiners” has something to do with it. It may be that the chart is not including sales by the off-brand re-sellers who are gaining a lot of market share as people are pinching pennies.

  58. marchesarosa says:
    April 10, 2013 at 4:20 am


    There is indeed a lack of congruence between the various measures given in this thread.

    So let me offer some historical perspective. The best analysis I’ve heard comes from Charles Krauthammer, who said that historically it can be shown that every nation’s economy collapses when the debt/GDP ratio gets in the 90-100% “red zone”.

    When Obama was first elected, that ratio for the US was 42%; when he was next elected, it was at 72%. Today’s news indicates Obama has submitted a $3.77 Trillion spending proposal that has both parties riled. At the current rate of government spending and quantitative easing (QE1, QE2, and now QE infinity), the US will reach the debt/GDP “red zone” before Obama is finished with us… errr… finished with his second term (what’s the difference, right?) And if you want to know if it’s deliberate or the most massive case of incompetence ever perpetrated on a nation, one only has to study Obama’s mentor Frank Marshall Davis.

    But wait, there’s more: The first four years of Obama undoes eight years of Reagan (and those were booming times, let me reassure you):

    http://amoraloutrage.wordpress.com/2012/05/06/four-years-of-obama-undoes-eight-years-of-reagan/

    Or you can compare the current “recession” with the past five for a sobering realization the US government isn’t fixing the problem:

    http://economix.blogs.nytimes.com/2011/07/08/comparing-recessions-and-recoveries-job-changes-2/

    One telling critique of the world-wide economy is to see all the major currencies in terms of gold since 2000. In 12 short years, the average drop is 80%! In other words, precious metals have performed exceedingly well over the past dozen years while all major currencies have cratered.

    So while you say there’s a lack of congruence between the various measures, the major indicators don’t look good at all. You can tout the stock market’s record high as a positive, but with the Fed pumping over a $Trillion of funny money into the economy every year (and plans to continue doing it until it collapses, since that’s reality), what you’re seeing is nothing but smoke–smoke from a burning economy.

    But the final nail in our economy will be the switch from the dollar as the world’s reserve currency. Already China is doing deals with Australia that avoid the dollar completely, as are Iran and Russia. And when that becomes the norm, watch for free-fall of our currency as all nations dump the dollar. Our economic irresponsibility will have destroyed a once-great nation.

    You’d better pray at that point the Chinese don’t come to collect on our debt.

  59. This theme is examined over at The Motley Fool:

    http://www.fool.com/investing/general/2013/03/27/when-americans-stopped-driving.aspx

    While they can’t come up with one or two solid reasons for the decline, the article points to standard themes like higher gas prices, a population shift from the suburbs to the city, and a demographic shift of fewer “highly mobile” 34-43 year-olds. Interestingly, lower gasoline consumption means the US has been a net exporter of gasoline since 2009:

    http://www.fool.com/investing/general/2013/04/09/where-in-the-world-is-our-gasoline-disappearing-to.aspx

  60. MattN says:
    April 10, 2013 at 3:35 am
    “… Also, 90million people out of work? Come on, that’s 1/4 of the US population. Unemployment is not at 25%…..”

    MattN, Shadow Government Statistics is reporting about 23%. John Williams, who runs the site, is in my opinion the Steve McIntyre of economic statistics. So, yes, unemployment is much, much higher than what our leaders would have us believe.

    Also, regarding GDP numbers, it’s important to remember that GDP (GNP) is a Keynesian construct which reflects their view of the value of government spending (fiscal policy). So, any money that the Fed manufactures out of thin air that is then spent on, say, a dog park, is counted towards GDP. $700 hammers, “investments” in things like Solyndra, bridges to nowhere, bailouts to needy folks like Goldman Sachs, etc. all are counted as contributing towards national wealth.

    The CAGW crowd did not invent fuzzy math (and I’m not talking about the good kind of fuzzy). It’s been around as long as governments have existed.

  61. @ScottR

    Not sure what you’re getting at, but the data you provided pretty much confirms Anthony ‘s conclusions.

    While his raw numbers may not be the same as yours, the trends are all heading down.
    I took the liberty of plotting the last ten years of data for:
    Finished Petroleum Products
    Finished Motor Gasoline
    Reformulated Motor Gasoline
    Conventional Motor Gasoline

    Here’s a link to the Excel file: http://sdrv.ms/Zh9bJy

  62. If families have more than one car, they may be trying to concentrate their driving on the car that gets better mileage. That might explain some of the difference between the miles driven and the gas bought numbers. People might also be investing in products that help their existing cars get better mileage.

  63. Inflation is carefully reported, though hidden in innumeracy. The value of a commodity, a barrel of oil or DJIA, changes only ponderously, while its cost varies by the minute. Invert the relation to see inflation, barrels/US$ or average industrial/US$.

  64. Pamela Gray says:
    April 10, 2013 at 5:16 am

    “However, this begs the question: Were we over-indulging ourselves in the past when cash was available? And was the manufacturing community willing to feed our desires? A good life does not mean buying a new washer every 4 years. It means buying a good one that lasts 20 years. However, if we return to a time when such purchases lasted a long time, we would soon see a growing poverty stricken population.”

    In my opinion, a good life means — FREEDOM! LIBERTY! PURSUIT OF HAPPINESS!

    I would concur with you that I would rather get one appliance to last 20 years versus 4, and that living more simply is better and having a lot of stuff. But that’s me. Not you – or anyone else. What offends me most about modern society is that someone (usually someone in government or climate “science”) appears to know what’s best for everyone. You drink too much soda! You eat too many hamburgers! You make too much money! Your house is too big! You’re too successful – you must have cheated to be that successful! You can’t watch that news network! You must vote for this political party! You must drive this kind of car! You must pay a carbon tax because YOU are responsible for global warming! I’m, frankly, sick of these nanny state hypocrites (especially those prominent hypocrites who populate climate “science” community), and will continue to resist their efforts to rob me, my children and grandchildren of our freedoms.

  65. @J Barber Wouldn’t all that stuff ordered online from Wal-Mart need to be delivered in vehicles that use substantially more fuel than a passenger car? I realize that consolidation of deliveries to highly populated areas offset that somewhat, but it still doesn’t explain the drop off.

  66. “That says to me that many people have just stopped buying gas. Consider that 90 million people are now out of the workforce.”

    I think you hit the nail on the head with that comment – people have to drive to work & if they aren’t working, they arent driving. Remember that unemployment numbers only reflect people looking for work, & not everyone who has given up looking for work – who also arent driving – this maybe be a better statistic than unemployment % in looking at the real unemployment

  67. robbcab says: April 10, 2013 at 6:38 am “Wouldn’t all that stuff ordered online from Wal-Mart need to be delivered in vehicles that use substantially more fuel than a passenger car?”

    No. mileage is not properly measured in naked miles/gallon, but more properly in passenger-miles/gallon or ton-miles per gallon.

    GD HD motorcycles are among the least efficient vehicles though their devotees can’t see beyond the end of their unmuffled exhaust ‘pipe’.

    My aforementioned VW can get around 200 p-mpg.

  68. Well the data seems fairly robust to me. This leaves two alternatives:

    If we are talking domestic sales from refineries, there is that option that the data is only recording US refineries and perhaps the US is importing more already refined oil?

    I saw some indication that this may be true from this news article:

    http://www.reuters.com/article/2011/09/27/us-conocophillips-trainer-idUSTRE78Q5R320110927

    For instance, if you look at that article, back when the largest drop happened, (Sept. 2011) a couple of refineries shut down and this chart might be over-emphasizing the slow-down in sales.

    Of course, the other option is that with decreasing volume of sales that the prices of gasoline are not going down because of limited supply. (this could be done on purpose to keep prices high). This would mean that once sales bottom out at a production of X, that various refineries simply shutter and so the demand is kept high in relation to total supply. This could be simply a short-term thing that will happen until prices return to appropriate levels. On the other hand, with this many slow-downs, we could be seeing a change in actual driving habbits in our country due to high-priced fuel and thus what we see is a natural market correction that will drive prices back down but not until driving habbits change for long enough. Its hard to tell really, but this does point to a change in driving habbits plus a change for less mobility at the same time for Americans. Fairly troubling…but no idea what this really means yet.

  69. The increased use of energy and using it more efficiently will pull us out of our present economic mess. However, this process will require some changes in our social behavior. most of those that are not in the paid workforce are on welfare, retired, stay at home parents, or do not have the skills or will to do the work that needs to be done. Computers robotics, and energy using machines have increased our effficiency and in the process have replaced many manual labor jobs. All those that are unemployed must be supported in some way because they must spend money to continue to exist. They are consumers that contribute to our consumer driven economy. I suggest we do a drastic overhaul of our tax and social system to catch up with our technical advances. I don’t think that this will happen with out some drastic changes in our congressional organization which may require constitutional amedments.

  70. “MattN, Shadow Government Statistics is reporting about 23%”

    That is a patently absurd unemployed number. 90M people is roughly half the 18+yo adult population of the US.

  71. The US has become a phony economy based on excessive private and especially public sector debt.

    The US has a $16.5 trillion national debt, a $600 billion trade deficit, $222 trillion in unfunded liabilities (primarily in Medicaid/care, Social Security and pensions), $1 trillion/yr budget deficits, $3 trillion in state/municipal debt and all this senseless debt is being funded by Fed money printing.

    This fiasco will not last much longer.

  72. Energy (gasoline) prices drive the US economy. Stable, low prices during the Clinton years grew the economy. Rising real prices since 2000 have killed it. The same thing happened back in 1980 when gasoline prices jumped and the economy tanked.

    http://www.randomuseless.info/gasprice/gasprice.html

    Printing money while enacting policies to raise energy prices is no different than having one foot on the accelerator and the other on the brake. You will quickly burn the car out.

    You cannot for long take money from an efficient Peter and give it to a less efficient Paul and expect to grow the economy. Over time there will be less real money available to both Peter and Paul. The truth of this is self evident in the employment numbers and energy prices.

    Without real money you cannot hope to transition the economy to “green energy”. Neither can you make people mend their ways by punishing them with taxes. They will hate you for it and take their revenge in ways you cannot defend. People will cheat the government if the government is seen as unfair. Corruption and decay will follow as night follows day.

    Reward Peter for his efficiency. Over time Paul will get the message and mend his ways. Otherwise, Peter will recognize that the system is unfair and will move his efficient operation to China or somewhere else that does reward him, or he will recognize that he cannot win and become like Paul.

    Why break your back carrying Paul if there is nothing in it for you? Might as well stop and let Paul carry his own weight. No matter what governments might think or try, Peter is no fool. He will not let you bring him down without bringing your own house down as well.

  73. Anthony,
    As a few others have mentioned, the bug is in “retail sales by refiners.” There has of course been wholesale in the past to off-brand distributers (i.e. 7-11 selling gasoline that they sure don’t refine) compared to Exxon selling Exxon refined gasoline. At those drop-off points what likely happened is that fewer people were willing to spend a few extra pennies stopping at Exxon, and now buy their gas at Wal-Mart or Kroger when they do their grocery shopping.
    The fact that

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M

    http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_5.pdf

    both align with the CO2 and other data (like total petroleum consumption) makes it much more reasonable to think there has been a ~10% decline in gasoline purchases than a 50% decline. Otherwise we would have to ask how we cut 25% of our Carbon use (petroleum is ~1/2 of our carbon use, and a 50% decline in that would be a total of 25% of all carbon) while only decreasing carbon emissions by ~10%.
    A 10% decline would then be appropriately explained by 4% decline in labor, increases in fuel efficiency, and smaller factors like online shopping (remember, somebody still drives it to your house – and usually they leave a large truck idiling while they walk the package up and have you sign). A 10% drop is still a huge amount of gas, but it is not the same as a total societal collapse that a 50% drop in 4 years would indicate.
    I assume this was probably an honest mistake, but since it has been pointed out several times I think the most honest thing to do is change the data set and correct the article.

  74. There is a whole bunch of stuff going one here, and the net is a fruit salad.
    VMT is not just cars, it includes both pick up and delivery (local) and long haul trucking, almost all of which is diesel, and which is down for two reasons: recession meaning less movement of goods, and growth of intermodal which is three times as fuel efficient as long haul trucking.
    EISA07 requires the addition of up to 10% ethanol. Theat blend wall was approached in 2012. Ethanol has only 2/3 the volumetric energy density of regular gasoline (one reason all the EPA numbers are off, since the regs are based on pure gas). The net reduces refined gasoline per mile by about 3-4 percent.
    There has been a shift in vehicle mix toward cars and away from ‘light truck’ which gives a large gain in MPG. There has been a slight improvement in MPG per vehicle type mandated by CAFE.
    There has been a reduction in commuting miles driven by a trend toward urbanization, in part because of the collapse in the value of the suburban housing markets.
    And for Kyoto emissions,mthere has been a shift away from coal and toward combined cycle natural gas. The most modern extra super critical coal plants are about 41% net thermal efficient, and the average (including older and smaller plants) is 34. CCNG run as base load is 55% efficient, and the newest Siemens unit (590 MW in Germany) hit a record for 2012 of 60.9%. The net of chemistry and thermal efficiency means CCNG produces about 1/3 the CO2 per MW that coal does. It doesn’t take the shutdown of very many old inefficient coal plants, replaced by CCNG, to cut CO2 some in a recession.
    Complicated systems like the economy seldom have simple answers.

  75. SMC says:
    April 10, 2013 at 4:39 am
    The 90 million out of work figure is out to lunch. Where does that number come from?

    Yes, the 90 million number is “out to lunch.” I don’t know why people keep citing it. Where it comes from is taking the entire U.S. population, subtracting the children, the military, and those in jails and nursing homes (the institutionalized), giving you the total adult population available to work and then subtracting the employed from that.

    The numbers as of March 2013 per http://www.bls.gov/news.release/empsit.t01.htm

    Non-Institutionalized Civilian Adults 16 and over: 244,995,000
    Working Adults 16 and over, the Civilian Labor Force: 155,028,000
    Adults 16 and over not working: 89,967,000 (the “90 million”)

    The 90 million includes every stay-at-home mom/dad, and every retired person in the country not residing in an institution. It’s ridiculous for anyone to claim that we have 90 million people in this country out of work, because most of that 90 million have worked all their lives and are now retired, or never intended to work, choosing to stay home and raise kids instead.

    In fact, the same report shows 11,742,000 officially unemployed, and if you figure that about 2.5% of the civilian adults have dropped out of the labor force due to the economy (the reduced labor force participation rate from 66% under Bush to 63.5% today) you get another 6.2 million or so who should be employed. Adding them to the 11.7 million officially employed and you get about 18 million who should be working or would like to work.

    Interestingly though, the report also lists those who “currently want a job.” That number is only 6,722,000 people. In other words, of the 18 million who should be working, nearly 2/3 of them are comfortable right where they are, which is most likely on the dole.

    The 90 million number is ridiculous, and the fact that it circulates at all is a testimony to the economic illiteracy of our news media, both left and right, and most of its readers. The real scandal is that we have about 10 million people who were either working in 2008, or were looking for work, who no longer want to work, but aren’t at retirement age yet. The scandal? We’re spending our tax dollars convincing them not to work, and it’s working really, really, well.

  76. Is it possible the disconnect in retail gasoline sales and miles driven may be due to the export of gasoline? Where retail gasoline sales do not reflect domestic gasoline consumption? It would seem an odd oversight, after all the gasoline sold has to go somewhere…

    Secondly, when this issue was pointed out a couple of years ago, the disparity in gasoline sales and miles driven was off somewhat but not to this level. At the time I concluded that people were limiting their short trips (low mpg events) to the store by combining activities and driving greater distances (higher mpg usage) using cars for going on vacation thus increasing the overall miles per gallon efficiency. The upshot meaning that cars were being used in their most efficient mpg range of service, the long haul trip, i.e. minimal city driving with it’s stops, braking and idling times.

    But we should also not discount the effect of high gas prices on RV motor homes which typically get 2 to 4 mpg, the RV industry crashed with the Recession back in 2008 and not recovered. Which brings me to the point summer vacation activities (RV, boating, ATV, etc.) may also be off significantly. Those activities use gasoline but are NOT included in the mileage estimate.

    Which leaves us with a disturbing third possibility, the conspiracy theory, the government is mis-reporting (under reporting) gasoline sales for a political benefit to claim their environmental policies are having the intended effect of saving the environment through more stringent regulation. However, in typical fashion they have overplayed their propaganda to levels of un/dis-believable proportions.

  77. I live in Los Angeles, so traffic is a constant concern. While I genuinely believe that the economic downturn has altered driving habits based on what I see. It has made parking a nightmare. The reason is very simple, the downturn closed many retail establishments in the greater LA area, forcing people who live in areas with fewer remaining stores to shop in places where there are more. In effect, the downturn is forcing the people of Los Angeles to drive further than normal to get what they want/need, and so they drive even less as a result.

    The 405 and 91 fwys are generally still a nightmare though.

    More importantly, online shopping is just now beginning to seriously replace the retail establishment. This means fewer miles driven as UPS delivery is a much more efficient method of delivering goods to consumers than everyone getting in their cars and driving to the electronics store.

    All that said, the labor participation rate should be front-and-center in the political debates, but it’s completely ignored.

  78. Frank K. says:
    April 10, 2013 at 6:37 am
    I’m, frankly, sick of these nanny state hypocrites
    +++++++++++++
    Why is it that the people with the largest carbon footprints in the world go around trying to force the rest of us to reduce our carbon footprints?

    Fear and Greed. Having gotten what they want in life, they know there is only so much food on the table. If the rest of us try and get our fair share, they are worried they are going to have to give up some of theirs.

    So, their message to the rest of us is “take less” so that we can “take more”. Do it for the good of the planet/children/polar bears/etc. Makes no difference, whatever tugs your heart strings and loosens the strings on your wallet.

  79. Anyone who believes that total gasoline usage in the U.S. has fallen 50% in less than a decade has their b.s. detector disabled today.

    I don’t know what that chart really shows, but it’s not what the author asserts. We’d be in a depression worse than the 30’s if actual gasoline usage had fallen that far, that fast.

    Fortunately, this being WUWT, it didn’t take long for the readers to begin to straighten matters out.

    P.S. Anthony, I think a situation like this calls for an: “Update: this graph does not show what the author claims it shows” with a reference to a comment that explains why, or some such. Handle it anyway you want, but once it’s clear that an article is b.s., readers should be made aware of that without having to dig through the comments to figure out why.

  80. MarkW says:
    April 10, 2013 at 6:36 am
    If families have more than one car, they may be trying to concentrate their driving
    =================
    The numbers are simple to reconcile.

    If two people ride 10 miles in the same car, they both are reporting 10 miles driven. However, they are only buying 1/2 as much fuel as compared to driving in separate cars.

    If you don’t have the money to run a car you are going to catch a ride with a buddy and chip in gas money. You aren’t driving less, but you are only buying 1/2 as much gas.

  81. Miles driven is correct, but the gasoline sales chart is highly misleading.

    US motor gasoline consumption, for the quarter ended March 2005 was 8.89 mbpd (Jan. 2008 EIA STEO).

    For the quarter ended March 2009 (the depth of the recession), consumption was 8.79 mbpd (April 2013 STEO, released yesterday).

    For the quarter ended March 2013, the number was 8.42 mbpd. (EIA April 2013 STEO).

    Thus, as I predicted in the 2009 article “Peak Oil Economics”, US oil consumption continues to fall, but not nearly as dramatically as the chart presented by Anthony above.

  82. Look:
    1) Less labor cost, same amount of goods produced [due to automation, out sourcing], increased income -> Stock Market UP.
    2) Federal Reserve stealing wealth by printing money -> Stock Market UP.
    3) Collapse in total work force employment [less tax revenue] -> Eventual Economic collapse !

    Number 3 above is the scythe!!!

    NOTE: Not fiction, look at Argentina, Brazil, etc., 30 years ago.

  83. ferdberple says:
    April 10, 2013 at 7:51 am

    Fear and Greed. Having gotten what they want in life, they know there is only so much food on the table. If the rest of us try and get our fair share, they are worried they are going to have to give up some of theirs.

    Notice the orientation of the people you describe. They are Malthusians. In actual fact, the pie is not limited, but they have been bred to think it is, so yes, they think the more you have the less they have. Thus their insistence that everyone except them has to do with less.

    Non-Malthusians do not see a pie, but an opportunity. What they have has no relation to what you have, so if you have more, it does not affect them.

  84. MattN says:
    April 10, 2013 at 7:07 am
    “’MattN, Shadow Government Statistics is reporting about 23%’ …That is a patently absurd unemployed number”

    No, it’s not. SGS takes the BLS’s U-6 numbers and then adds in “…SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994…”

    This gives us a number that can be compared to to the way unemployment used to be reported before the Clinton administration redefined things to make the economy look better.

  85. @Doug Huffman I get it. An average city bus carrying ~50 passengers will equal your 50MPG VW in P-MPG. Unfortunately, as of 2009 the Dept. of Energy reported that the average number of passengers on busses was 9.2, which reduces those efficiency numbers.

    I was speaking generally about the delivery vs. consumer driving. In a perfect world, if every customer were equidistant from the purchase location, yes, deliveries would shave almost 40% off mileage. Unfortunately, as with busses (and CAGW), reality is different from theory.

  86. Isn’t gasoline CONSUMPTION a more reliable proxy than retail sales by refiners? Seems to me that the data here:

    http://www.indexmundi.com/energy.aspx?country=us&product=gasoline&graph=consumption

    and here:

    http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10

    are more important indicators of demand and use. A few comments have focused on this data and I think they are on the right track.

    Seems to me that refiner sales are NOT going to be the data you want to reflect total gasoline retail sales. I would argue that gasoline consumption levels are going to be more reflective of product volume demand and sales, and thereby a better indicator of economic activity.

  87. Rod: Don’t forget to include the millions of full time students in there, and the 90M number is even more absurd.

    50% gas decrease, 90Million unemployed. April 1 was last week, fellas….

  88. They don’t need a lot of fuel when they collect dual electronic payments each month for a) disability, the fastest growing part of the budget, and b) food stamps, the other top growing item in the budget. There is a growing sense that structural unemployment is setting in with very significant deterrents to taking a risk with working and the commuting that goes with it. And the cyclical unwinding of these factors is not as clear as it was in past recoveries. Another point is that the rate of women entering the workforce topped out around the year 2000 and we did not notice as the housing bubble and debt binge worked up to the breaking point. Generally, we borrowed to make up for the deceleration of growth of two-income families in the period of 2000-08. In the aftermath of the debt unwinding and this background female labor force growth story, recovery rates and even long-term growth are being reset to a new normal that is not a fuel intensive scenario. Some of these overlaid long-term cycles remind me of the yet-to-be-recognized factors of significance in climate models.

  89. One possible explanation of the sharp drop in gasoline usage is online sales.

    I used to drive down to a local store and see if they had the item I want in stock. After looking at the true cost of such a trip .15-20 cents a mile and climbing at the time (fuel, tires, wear and tear etc.), plus putting a value on my time spent shopping, I started buying a lot of goods on line.

    Those are delivered in a highly efficient delivery route which expends far less gasoline (usually diesel and natural gas powered delivery trucks). The proportional amount of fuel expended per retail sails made is going to make a substantial shift just from that. As gasoline got more expensive I also started doing the same thing I did in the late 1970’s early 1980’s and combine trips, making several stops on the same trip. I now exclusively shop for groceries on my way home from work. My extra distance traveled for the groceries is now measured in feet as the it is only the distance from the turn off to the parking spot in the store lot and getting back on the highway I use every day to get home from work. If I have to make a short trip I pause for a moment and try to think up some other task I will need to do eventually which I can accomplish on the same trip.
    I also have more than one car, when fuel is expensive I take the more economical car, that switch amounts to about an 18%-25% reduction in fuel used for the same miles driven.

    This is a net effect of millions of such decisions, plus changes like telecommuting a couple days a week, or people shifting jobs to shorten commute distances, eating at work with a brown bag lunch instead of running down to the local fast food outlet, or car pooling several workers instead of each driving by them selves.

  90. Cash for clunkers got a lot of older cars off the road. Perhaps that resulted in an increase in average fuel economy of cars on the road that was greater than the increase in average fuel economy of new cars that were being sold?

  91. >> RE: marchesarosa says:
    April 10, 2013 at 1:30 am <<

    The "Labor Force Participation Rate" is not based on the entire population, but only on the subset that is working age. The participation rate includes those looking for a job, so the 63.3% includes 7.8% who are unemployed but looking for a job. Likewise the 67.3% in 2000 includes the 4% who were looking for a job. Your calculation should be (.673-.040)*212.5M compared to (.633-.078)*241.4M [est]. That gives 134.51M in 2000 vs. 133.97M in 2012. Basically the US workforce has dropped 0.37% from 2000 although the working age population has grown by 13.6%.

    http://economics.about.com/od/unemploymentrate/f/labor_force.htm

    http://www.bls.gov/fls/flscomparelf/tables.htm#table12_epr

  92. MattN says:
    April 10, 2013 at 3:35 am

    Unemployment is not at 25%…..

    It would be close to that if unemployment was calculated the same way they did back in the 30’s.
    If you have given up looking for work, you are no longer counted as unemployed.
    If you took early retirement rather than being layed off, you are not counted as being unemployed.
    If you are on permanent disability and no longer looking for work, you are not counted as unemployed.
    If you are a teenager who can’t find a job, but aren’t collecting unemployment because you have never had a job, you aren’t counted as unemployed.

  93. tim in vermont says:
    April 10, 2013 at 3:59 am

    I have been driving to Boston for medical reasons and I have noticed that traffic is less bad than when I lived there 20 years ago.

    Didn’t Boston recently complete the “Big Dig”?

  94. Cash for Clunkers was a one-time short lived experiment and would show up in the data as a step change.

  95. MattN says:
    April 10, 2013 at 9:34 am

    Rod: Don’t forget to include the millions of full time students in there, and the 90M number is even more absurd.

    The term is “not in the labor force” which the 90m are not. Some full time students ARE in the labor force (I was). Some retirees ARE in the labor force. So blanket statements about what constitutes the 90 million is not always correct.

    But we do know that 90m of working age are not doing so. For whatever reason. That is then used to find the “labor force participation” rate. And that number is the lowest it has been in almost 100 years. Even though the population was a lot smaller 100 years ago, the RATE was actually higher.

  96. I don’t know exactly what the correlations between the varying data presented here is and I don’t particularly care. The only thing that should be registering is that we are in serious trouble. Whether you believe Obama is doing this deliberately or not is irrelevant, he is doing it. When the dollar is no longer the reserve currency all of us are going to be hurting. When gasoline costs $50/gal I hope all the numbskulls that voted democrat all of their life do the math, although I don’t suspect them to given they voted the worst president in the history of the US back into office (with a healthy helping of voter fraud to back up the idiots). Of course at that point we will be in far worse shape than worrying about where to get gas in all likelihood. Or perhaps the people working for good in what is left of the market (the private sector businesses trying to keep their heads above water while the Obama administration cuts them off at the knees) will manage to drag us through this without a total collapse. I am hoping for that but I am planning for worse. By the way, the Euro will collapse along with us, possibly before us given current indicators.

    Silver is a relative bargain lately (down .28 today at $27.60)…just sayin

  97. >When gasoline costs $50/gal I hope all the numbskulls that voted democrat all of their life do the math

    Matt, the Repubs are no better. Have you forgotten about Romney the healthcare architect or Paul Ryan the auto bailout lover? Last time I checked our military spending is greater than that of the next 14 countries combined.

    This will end in tears.

    “The 2012 fiscal condition of the United States suffered its worst annual deterioration in the history of the Republic. Based on generally accepted accounting principles (GAAP-based accounting), the actual federal deficit hit a record $6.6 trillion in the year ended September 30, 2012, a level that was fully 42% of the nation’s annual GDP… the United States will be doomed to an eventual hyperinflation, as the government prints money to meet its obligations, a process that already has started.” http://www.shadowstats.com/article/no-500-special-commentary-us-government-gaap-based-2012-financial-data

  98. I concur with the comments above – the Retail Sales numbers CAN’T be right. Drilling into them to the raw data calculates an MPG in 1984 in the low 30s and an MPG in 2012 above 90. (That’s even after adjusting for the fact that the miles driven are rolling 12 months and sales are actual.) There could be some slight distortion by the shift to alternative fuels but there hasn’t been nearly enough shift to diesel or other fuels to make the reported MPG show what results from those Retail Sales numbers

  99. As a retired Red Coat, forgive me if I speak out of turn, but does not the fall in the US economy shown in these graphs commence with the arrival of one Barack Hussein Obama II?

  100. The current inflation number of ≈2% is absurd. If inflation was calculated now the same way it was calculated during the Carter presidency, inflation would be about 11%. Anyone who buys gasoline or shops at a grocery store knows this is true.

    And here is the real hockey stick.

  101. Couple thoughts:

    1. Have lots of folks who lost their homes moved in closer to work? Perhaps they no longer live in McMansions in the suburbs, but are renting closer in?

    2. People typically used their credit card to pay for gas, right? Now that there are fewer credit cards (sorry, no stats), and maybe they’re using debit cards or cash to pay for gas, they are buying less gas and car-pooling more?

    I think of this because in the early 90s I typically drove 100 miles a day. Now I often don’t drive even 10 miles a day.

  102. I haven’t read the rest of the posts yet, so please forgive if others have already addressed this.

    re: marchesarosa says: April 9, 2013 at 11:50 pm

    From 1978 to the present I am sure the US population has grown so even though the workforce participation RATE has fallen from a peak of 67% to 63% now the actual NUMBER of people working has probably increased so the participation RATE cannot be taken as a proxy for petrol use.

    REPLY:your “probably” argument doesn’t cut it here, show some data – Anthony

    I don’t where the cross over point is, but there is merit to Marchesarosa’s note. See the following, which shows total person’s employed, population increase, and some related relevant info: http://www.ritholtz.com/blog/2011/05/employed-persons-1999-2001-2003-2011/

  103. re: Jan Kjetil Andersen says: April 9, 2013 at 11:51 pm

    The statistics does not include all motor gasoline sold. You can find the total numbers here: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M
    As you can see it is four times bigger than the retail sales by refineries

    Don’t forget that beginning in 2011, the USA became a net exporter of refined petroleum products. So the total amount sold isn’t going to be a direct proxy to USA use either, or at least not since 2011. http://www.eia.gov/todayinenergy/detail.cfm?id=5290

  104. @ Steve Keohane:

    Bartering and buying second-hand are both probably greatly increased. In the last couple years, I know I have bought quite a few pieces of furniture off craigslist, and clothing off ebay. I’m getting the furniture because (being a frugal person most of my life) I never had much in the way of solid wood pieces, and new products just seem flimsy and soulless. I’m getting the clothing off ebay because it’s cheaper than new and better made than most new products. Also, the older styles are less immodest. And don’t get me started on new vs old kitchen gadgets!

  105. Another thought:

    How much of agriculture use of fuel is included in those figures? Since crops have been declining because of the global cooling, I’m thinking farmers are less likely to be running their big machinery as much as before.

    I see wheat is 696 today. My ex used to get around 350.

    As I understand it, the price of wheat rises greatly during a solar minimum.

  106. Let them drive Teslas!
    (And I really hate that they abused Tesla’s name for their subsidized car)

  107. OK. Here’s another thought:

    My teenager has NO DESIRE to drive.(!) I forced my kid to take driver’s ed last summer. Yet my kid has never driven my car.

    When I have talked about this with other parents, they say the same thing. Their teenagers seem to be sincerely lacking in get-up-and-go.

  108. I’m a perfect example of this. I used to make 3-4 major (1,000mile) trips per year and would go on a dozen or more in-state weekend trips to model airplane shows. Since Obama came into office and the price of gas doubled and our income dropped 50%, I’m down to one or less major trips a year and maybe two or three in-state trips. All the community economies I used to bolster are now doing without my money (not just gas but hotels, food and shopping). I may be ‘greener’ but that also means that my lifestyle and those I supported are poorer for it.

  109. Thank you for the updated data. (I suppose I should have refreshed the screen before locking in my prior comment.)

    Comparing the underlying FRED data (average vehicle miles traveled) to US supplied finished gasoline (also converted to rolling 12 mon), I calcuate an average MPG in 1971 of about 11.8, rising fairly steadily to a current average MPG of about 20.5. There are no spikes, surges or irregularities in the trend.

    Interestingly, the steepest increase is from 1979-1981. Nationwide MPG has been basically flat since 2000. The recent alternative fuels trends barely even show as a blip..

  110. Frank K. says:
    April 10, 2013 at 6:37 am

    In my opinion, a good life means — FREEDOM! LIBERTY! PURSUIT OF HAPPINESS!

    I would concur with you that I would rather get one appliance to last 20 years versus 4, and that living more simply is better and having a lot of stuff. But that’s me. Not you – or anyone else. What offends me most about modern society is that someone (usually someone in government or climate “science”) appears to know what’s best for everyone. You drink too much soda! You eat too many hamburgers! You make too much money! Your house is too big! You’re too successful – you must have cheated to be that successful! You can’t watch that news network! You must vote for this political party! You must drive this kind of car! You must pay a carbon tax because YOU are responsible for global warming! I’m, frankly, sick of these nanny state hypocrites (especially those prominent hypocrites who populate climate “science” community), and will continue to resist their efforts to rob me, my children and grandchildren of our freedoms.
    *******************************************************************************************************
    Funny we have the same problem in Australia. Soon “they” will want to change our nappies.

  111. re: BioBob says: April 9, 2013 at 11:54 pm

    @Steve B — or the currency has been inflated by over 25% and the 10% increase equals at least a 15% drop in actual sales volume. My own calcs have shown purchase price for a 2 year old low mileage car has risen over by 30% in 2 years. That is simply a function of the inflating currency. Do the math on the unit price of gas and see what you get !!

    Biobob, the Cash for Clunkers program demolished the used car market, and drastically increased the price of remaining used cars. That may have as much or more to do with the price increase as the unquestionable devaluation of our currency.

  112. MattN says: April 10, 2013 at 3:35 am

    Also, 90million people out of work? Come on, that’s 1/4 of the US population. Unemployment is not at 25%…..

    SMC says:April 10, 2013 at 4:39 am

    The 90 million out of work figure is out to lunch. Where does that number come from?

    The unemployment rate only counts people who are ostensibly still looking for work. The labor force participation rate is at a very low level – down to 1979 levels. That means that there are many people who are not only unemployed, they are no longer looking for work either. They are either surviving off of welfare, disability, or living with someone who supports them. That where the 90 million number originates. See: http://www.zerohedge.com/news/2013-04-05/people-not-labor-force-soar-663000-90-million-labor-force-participation-rate-1979-le I’m sure you can find plenty of other sources for more detail if desired also.

  113. @ thelastdemocrat says: April 10, 2013 at 6:12 am

    “the economy has failed to keep up with creating sufficient jobs for its increasing population.”

    … As population grows, there are more people to create wealth, such as by growing food, and more people seeking to consume stuff, such as food. There is nowhere in economic theory, outside of Malthus, that a population can get too big to function. It just doesn’t make sense.

    Unfortunately it does make sense, and it’s been happening. Companies aren’t hiring, or expanding. They are sitting on their capital, because of the gross economic uncertainty, drastically increased regulatory and tax burdens (e.g., Obamacare), fear of rampant inflation because of all the money printing by the feds, and so on. They’ve got to conserve capital to be able to cover these contingencies without going out of business. So you wind up with an economy that fails to create sufficient jobs for it’s expanding population, just as we have been seeing for some time now.

  114. MattN says:
    April 10, 2013 at 9:34 am
    Rod: Don’t forget to include the millions of full time students in there, and the 90M number is even more absurd.

    Yes, students who are not employed would also be in the 90 million. In fact, the 90 million comes from a calculation involving everyone 16 and older, so not only college students, but every non-working high school kid in the country who is already 16 is also included in the 90 million number. It’s a ridiculous number to cite when talking about the unemployed.

    As I said, the real scandal is that of the actual 18 million or so who should be looking for work (because they were either looking or actually working five or six year ago), only about 6 million of them currently even want a job, most likely because they’ve found a cushy way to live without one, on our tax dollars.

    I’m not against unemployment compensation, but paying people not to work for two years running, and then making it easy to get on disability afterwards, is scandalous.

  115. philjourdan says:
    April 10, 2013 at 10:35 am

    But we do know that 90m of working age are not doing so. For whatever reason. That is then used to find the “labor force participation” rate. And that number is the lowest it has been in almost 100 years. Even though the population was a lot smaller 100 years ago, the RATE was actually higher.

    True for men, but false for men and women together which is what we’re talking about, at least since 1948, according to this graph:

    https://en.wikipedia.org/wiki/File:US_Labor_Participation_Rate_1948-2011_by_gender.svg

    You’re right about the participation rate for men. When they were the main breadwinners the rate was much higher than it is now. I suppose they started work early, often didn’t finish high school, or even start it, and worked until they died if they could, since they had no social security to rely upon. Plus, lives led working hard meant many didn’t live nearly as long as they do now.

    The rate peaked around 2000 at about 67% and fell slightly until recently, and has dropped more sharply since Obama’s regulators have made it easy to join the unemployed ranks.

  116. Rational Db8 says:
    April 10, 2013 at 4:44 pm

    … That means that there are many people who are not only unemployed, they are no longer looking for work either. They are either surviving off of welfare, disability, or living with someone who supports them. That where the 90 million number originates.

    No, it’s not where it originates. The 90 million includes retirees, students, and stay-at-home moms/dads, plus any other category like that. Granted it also includes your welfare, disability, living-off-the-relatives crowd, but they are only a small component of the 90 million.

    As I said earlier, there are about 245 million people in the U.S. who are 16 or older, not in the military, and not in an institution (jails and nursing homes, primarily). Of those aboiut 155 million are working. The other 90 million aren’t, but certainly shouldn’t be considered “unemployed,” unless you think everyone’s 16-year-old high school student should get a job, as well as their 85-year-old grandparents.

    I think the unemployment situation in this country is horrendous, but we don’t need to use misleading numbers to make the case. The real numbers are sufficient to do that.

  117. re: Saruman says: April 10, 2013 at 12:55 pm

    Matt, the Repubs are no better. Have you forgotten about Romney the healthcare architect or Paul Ryan the auto bailout lover? Last time I checked our military spending is greater than that of the next 14 countries combined.

    I beg to differ. Romneycare is worlds apart from Obamacare. Romneycare was 70 pages long, Obamacare over 2300. Romneycare was widely supported throughout the very liberal state. A majority opposed Obamacare nationwide. Romneycare didn’t increase taxes. And while the cost of health care in Mass is very high, it did apparently mange to get the majority of the population covered – Obamacare by all estimate and projections will not.

    I will grant you that there are a lot of very moderate Repubs – Paul Ryan being one of them. But at least he has the guts to actually put forth real legislation, legislation that actually at least helps slow the increase in spending and reduce the deficit (albeit too slowly, 10 years), and put entitlements back on sound footing. Yet he gets routinely branded as being “extreme” and the Democrats in the Senate will not even vote on his budget, etc.

    Even so, I have to note also that Ryan’s budget’s and so on are a vast improvement on Obama’s. Take for example Obama’s latest budget – full of gimicks and it’s for $3.77 trillion, and he claims he’s cutting the deficit with that sack of cr#p. In other words, Repubs aren’t great, and they’ve a long way to go, but they are notably better than the Dems when it comes to fiscal issues. And at least they continue to oppose all the enviro-fanaticism as they can, rather than advocating pouring yet more $$ into it.

  118. @ Rod Everson says: April 10, 2013 at 5:46 pm

    While your post has some merit, this is how the labor participation rate has been calculated for quite some time. I also have no problems counting 16 year old’s as unemployed. I started working regularly outside the home when I was 10 or 11 years old (babysitting), then in retail when I was 14. By 16, most of the kids I knew of also had part time jobs. If they wanted things, like a car or whatever, they had to work to buy those things rather than having them handed to them. As a result, they learned a bit about fiscal and individual responsibility, and developed a work ethic. Obviously I don’t expect 85 year old retirees to have a job, unless they want one, and there are some who do.

    Regardless, by definition, people of working age who are not working, whether by choice, or disability, or inability to find work, are unemployed.

  119. well, just as a nit pick… The USA also now exports petroleum products. While we used to do a lot of “Diesel for Gasoline” swap with Europe… As West Texas oil is now much cheaper than Brent (North Sea) we don’t have as much incentive to import gasoline, and have more incentive to export both. This tends to limit price drops on products.

    So here in Kalifornia, Gas is well over $4 / gallon. Unemployment is crazy high. And our Governor Moonbeam is off in China begging them to buy more of the State…

    Under those circumstances folks do NOT drive anywhere for a vacation.

    A couple of years back I drove to Florida for a contract job. (Did it a couple of times actually). That’s about 100 gallons each way. ( I made that run at least 10 times on a couple of jobs so figure about 1000 gallons JUST for those jobs.) Now I fill an 18 gallon tank “once a quarter” and don’t drive to the far away grocery store… Call it less than 80 gallons. No job? No drive….

    It’s pretty simple, really: Gas prices are NOT down, even with less demand. Wages in both real and nominal terms ARE down. Folks don’t have a choice. Note, too, that upper middle class retail is having issues as are middle high end restaurants. (Very upper crust is doing fine, and Wally World is doing fine… “Barbell”. The Middle Class are the folks getting squashed down into Wally World land.)

    There is a global “race to the bottom” in currency depreciation with Japan and the USA both having a flood of money creation and China pegged to the $US in a Mercantilist way. The EU is in a slow motion bank run (being called a “Bank Walk”) after raiding the Cyprus Piggy Bank for Russian “contributions” and now the EU central bankers are eying Bank of Italy and Spain too… They are toast, and know it. Germany has decided not to keep funding the party, and everyone else is broke / in dept up to the moon. . So other than inflating the stock bubble more as they try to blow air back into the Housing Bubble the simple fact is that The Fed and the Japan Central Bank and the EU Central Bank are all trying to fix a fiscal spending problem with an easy money monetary tool and it doesn’t work.

    There may still be time to recover this process, but none of the players are doing the right things. So will it end in a new great “bubble and bust”? Nobody knows. This is uncharted territory. (I.e. perpetual $Trillion+ deficits are literally off all charts…) but the highest probability is that it will end badly.

    The simple fact is that China is collecting all the marbles and it will be up to them what happens. The USA (and increasingly the EU) have gutted their industrial capacity and sent manufacturing to China. So once China decides it owns everything, who can say no? The way to ‘fix it’ is break the mercantilist currency peg and have a decent energy and business supportive tax and regulatory climate in the USA (and EU) but that just isn’t happening, nor likely in the next decade.

    So, sorry to say, I think this only ends when China tells us what to do next… and we can’t say a thing about it…

    We simply do not have the capital infrastructure, nor the labor force, nor the regulatory and tax environment to compete nor to support our burgeoning retired / welfare / government worker populations. So we go bankrupt. The only questions, really, are how it will be hidden and how soon.

  120. I reblogged early. Now I cannot reblog again to capture the update. I decided to write about it. Feel free to stop by. I think I made the important points at the top, but I might have written too much.

    The graph I think contributes here is this: http://www.epa.gov/airtrends/aqtrends.html
    It indicates miles driven tracked with GDP to about 2006. Then it decelerated relative to GDP. Energy tracked population growth until government policy drove up prices and fuel poverty.

    This LLNL graph is informative too, but not as relevant to the discussion of gasoline usage reduction: https://flowcharts.llnl.gov/content/energy/energy_archive/energy_flow_2011/LLNLUSEnergy2011.png

  121. John Slayton says:

    April 10, 2013 at 6:07 am

    Petrolhead: …diesel uses 5 liter per kilometer and gasoline consumes 7-10 liter per kilometer.
    Man, what are you driving? That figures out to about 2 gallons per mile.

    this is an error of course. This is consumption per 100 km.

  122. @Saruman

    Generally agree with you, although not for the reasons you cited. To be clear, the Repubs are better, but I don’t think going off the cliff at 5mph in 40 years is a huge benefit versus going off the clifff in 3-10 years at 100mph with the Dems, but the Repub path gives us time to try and correct things. The democrat party is the greatest criminal enterprise in the history of the world. If you measure the wealth stolen from the public to fund the various great society programs, depending on which estimate is used I have seen between ~$70trillion up to $200trillion. Republicans have generally been on the right side of the debate all along, where they fail is when they compromise and accept the Democrat philosophy of government as valid. The modern Democrat theory of government is progressivism, which is a fancy way of saying some eutopian variant of marxist/socialist/fascist junk which they don’t like to admit to but clearly this is their philosophy. Many Republicans oppose this, however some are RINOs and clearly don’t care what goes on in the health of the nation so long as they are personally empowered, ie John McCain, Lindsey Graham, Olympia Snow etc. Ryans long term budget plan sucks, but in comparison to any Democrat plan it is stellar. We are so deep in the hole I am not convinced there is any way out of it in reality. We have had a spending problem in this country and it has been propagated by both parties, however the Democrat party has made that spending problem orders of magnitude worse than the other and unfortunately at this point it is not relevant since the odds are continuously shrinking that we will be able to escape from it without an earth shattering global economy destroying hyperinflationary period as you have noted. Ever wonder why the Dems have had no Budget for the last 4 years? The mob has nothing on the Democrat party. They are robbing us all blind and they do it right in our face and it’s all “legal”. Our representatives just keep rearranging the deck chairs on the Titanic paying no heed that we are full steam into calamity’s grasp. As I said before though, free enterprise maybe our only real hope, perhaps some game changing invention will come into view that can overturn all other trends and pull us through this, but it seems the odds are otherwise overwhelmingly against us. Modern Fracking and the O&G is trying hard and could be the dark horse to keep us from going under but that is under heavy fire from one of the many enforcement arms of the left, our fine super green friends.

    I have a friend who spent some time in Zimbabwe awhile back, he has a stack of money they were printing during their hyperinflationary period, ever seen the pics of people using wheelbarrows to buy a loaf of bread? Of course here we have a large economy that is capable of producing its own energy and many other high value items that give us a distinct advantage in the battle but at some point everything is going to see a major correction and it will make the last one look like childsplay.

  123. Rational Db8 says:
    April 10, 2013 at 6:30 pm
    @ Rod Everson says: April 10, 2013 at 5:46 pm

    While your post has some merit, this is how the labor participation rate has been calculated for quite some time. …

    Regardless, by definition, people of working age who are not working, whether by choice, or disability, or inability to find work, are unemployed.

    Look, words matter. By your personal definition they are apparently “unemployed.” No one else, anywhere, seems to be arguing that grandma should be considered part of the unemployed. Only those who’ve seized on the 90 million number, and I’d wager most of the talking heads using it don’t even realize grandma’s in the number they’re citing. (By the way, most of the time I agree with those very “talking heads” I’m referring to, but they’re way off base on this one.)

    There really are 16 to 18 million people in this country who either want to work and can’t find any, or should be working but don’t have to because we’ve made it too easy for them to sit home (or too painful to give up their current benefits for what they’d receive by working.) Why trumpet a number that is completely irrelevant to the concept of unemployment as most people think of it?

  124. Re: Rod Everson says: April 11, 2013 at 7:49 am

    Rod, words do matter. I wasn’t ‘trumpeting’ the 90M number, I was explaining to others where the number comes from, and how the term labor force (job) participation rate (LFPR) is calculated. Using the terms as they are defined and used by the BLS, etc. Now you don’t happen to like those definition. While I would agree with you that the elderly ought not be counted as unemployed, other than perhaps to maintain our ability to compare LFPR over time, it doesn’t change the fact that they are included and defined as unemployed in the metric. It’s that simple. Were I to use words differently than they are defined, it would just serve to dumb things down all the more. Better to explain what such metrics use in their calculations instead, and go from there. We can have a similar discussion about the unemployment rate and inflation. Do we talk about the commonly used metric which pegs unemployment at about 7.8%, or I think it’s the U-16 rate which includes both unemployed and underemployed and is much higher? And how about inflation? The calculation for it has been modified I gather, such that if we used the same method as during Carter’s days, our inflation rate would be in double digits also. But because they redefined the calculation, we can’t easily compare to historical rates – not with any meaning. So, yes, words matter. How things are calculated matter. How the same metric was historically calculated matters.

  125. Concerning the plot in the original posting labelled “Monthly US Total Gasoline Retail Sales”, I sent a question to the EIA asking what happened to cause the precipitous drop in August, 2011. The answer explained that that data depends on who is reporting those figures, and as refining capacity is transferred from one company to another the figures become unreliable. I was referred to a better measure at http://www.eia.gov/petroleum/data.cfm#consumption which shows a much more believable plot of Gasoline sales, with only mild declines.

    Text of the EIA response to my question:

    Thank you for your inquiry to the U.S. Energy Information Administration (EIA) concerning the gasoline sales data that we publish.

    Refiner sales do not represent total, retail gasoline sales, a proxy for end-use consumption. For the latter, the data for Product Supplied and Prime Supplier Sales at:

    http://www.eia.gov/petroleum/data.cfm#consumption

    Regarding he refiner sales data, that is from the EIA-782A, “Refiners’/Gas Plant Operators’ Monthly Petroleum Product Sales Report.” This is a census survey, the scope of which is to capture price and volume data from refiners and gas plant operators currently operating such facilities within the United States. You can access a copy of the survey at:

    http://www.eia.gov/survey/#petroleum

    There have been many changes taking place in the petroleum product marketplace in the United States over the past few years, including some companies that are divesting or realigning significant portions of their asset portfolios. Some of the change you observe in the data on sales of gasoline through retail outlets by refiners is the result of these transactions. More specifically, if a company closes or sells all of their refineries and/or gas plants, then that company no longer falls within the scope of the survey, and EIA will no longer be able to collect any sales data from them through this particular survey. If you have any additional questions or concerns regarding that data, you may contact:

    Maureen.Klein@eia.gov
    I hope this information helps. Please contact us again if you need further assistance with energy data and statistics.

    Paul Hesse | Information Dissemination Specialist

    Z Inc., Contractor to the Office of Communications

    U.S. Energy Information Administration

    http://www.eia.gov

  126. The Labor Force Participation Rate chart tells the tale! We are back at Jimmy Carter (malaise..malaise) recession unemployment rates. Unfortunately, the curve is showing no indications of a rebound yet, only a continued steep shift from workers to nonworkers.

    With fewer gallons of gasoline being purchased, one could expect an increase in supply and lower prices. Again, unfortunately for the US consumer, gasoline supply has been constrained by diminished refining capability in the US. This has occured, at least in part, as a result of government constraints on permits for new refineries and the usual lawsuits from Sierra club-style Luddites.

    In addition, refined petroleum products et.al remain a popular target for increased federal and state taxes, further burdening the consumer with escalating costs. This isn’t accidental. Common tax policy states “If you want to change consumer behavior, restrict supply and tax the hell out of the commodity (ex.: cigarettes) and let classic supply and demand economics prevail.” Funny how those who decry ‘capitalism’ sure know how to use its unyielding cause-and-effects causation to get what they want, isn’t it?

    Barack Obama: Under my plan…. electricity prices will necessarily skyrocket.

  127. Rocky To a said”the final nail in our economy will be the switch from the dollar as the world’s reserve currency. Already China is doing deals with Australia that avoid the dollar completely, as are Iran and Russia. And when that becomes the norm, watch for free-fall of our currency as all nations dump the dollar. Our economic irresponsibility will have destroyed a once-great nation.”

    I agree. The writing has been on the wall for the petrodollar for quite some time. The Petrodollar provides a very big free lunch for the USA at the expense of the rest of the world and if/when it is replaced by another currency, then the US’s errant chickens will come home to roost in a big way!

  128. According to Platts, European refineries exported 335,000 b/d of gasoline to the US East Coast in January. That equates to a little over 14m gal/day which is a very close match for the precipitous drop in the graph from Aug 2011 til now.
    Mystery solved?

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