Tuesday, November 16, 2010

Economic growth or gasoline price inflation?

Robert Wenzel has been recording on his http://www.economicpolicyjournal.com/ blog in recent days a variety of inflationary trends: groceries, farm land, tea, and cotton prices, for example.

Yesterday he noted that in the Census Bureau report on October 2010 retail sales

The Census Bureau is reporting that retail sales in October 2010 were $373.1 billion, an increase of 1.2 percent from September and an increase of 7.3 percent from October 2009.  Excluding autos, retail sales were $306.1 billion, up 0.4 percent from last month and up 6.0 percent from last year.

The most interesting piece of information in the data may be the year-to-date climb in gasoline station sales. Those sales are up 17.2%. That's not because consumers have decided to increase their driving by 17%, it's because gasoline prices are soaring.
The closest "growth" area YTD after gasoline stations is nonstore retail (aka, the internet). Those sales are up 12.7% (which is also probably indicative that consumer driving may be down, since you don't burn a lot of gasoline surfing the internet.)

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