Gas prices soared as Russia’s invasion of Ukraine raises questions about energy supplies and a rapidly recovering economy boosts demand for fuel.
“ Bubble Watch ” digs into trends that may indicate economic and/or housing market troubles ahead. Buzz: Southern California gasoline prices broke the $5 barrier in March’s first week, smashing a record high that had stood for nearly a decade. But what do today’s pump prices mean in the long run for the economy? Source: My trusty spreadsheet looked at the economic impact of pump prices using benchmarks that stretch back 40 years to the last great inflationary era of the 1980s. The analysis ends with 2019, avoiding any pandemic-related gyrations seeping into the math. Russia’s invasion of Ukraine raises questions about global oil supplies. A rapidly recovering economy created numerous reasons for folks to drive and fly, boosting demand for fuel. So, gasoline jumped an average 53 cents to $5.20 a gallon — topping the old peak of $4.74 set in October 2012. The economic yardsticks pondered: Gas: Gas prices in the Los Angeles area showed 3.4% annualized gains since 1979, according to the federal price index. Fuel went from 94 cents a gallon 40 years ago to $3.58 in 2019. Ah, the good old days! Extremes? The most painful year was a gas-price jump of 35% in 1980 vs. a 24% decline in 1995. Unemployment: The California jobless rate went from 6.2% in 1979 to 4.3% in 2019. Biggest changes? From rocketing 12.5% higher in 2010 to tumbling 4.2% in 2012.
