According to AAA, 46 million Americans will either hop in a car, plane, train, or boat this July 4th weekend, and while gas prices are up on the year, relative to prior July 4th weekends they haven’t been this low in over a decade. The table to the right shows the YTD change for the national average price of a gallon of gas as of 6/29 along with the YTD change. At a national average price of $2.294 per gallon, prices are up 14.9%. While that’s the largest YTD change in five years, because prices are coming off such a low base the absolute price remains low.
The chart below shows a composite chart of the national average YTD change in price of a gallon of gas going back to 2005 compared to this year. While this year started off on a weak note, beginning in February, prices started to follow their seasonal trend and rallied right through the beginning of June. While prices were up nearly 20% on the year at one point, following the recent pullback the YTD gain has pulled back to less than 15%. If the pattern continues to gold going forward, prices have likely peaked for the year and should trade in a sideways range for the remainder of the summer, and then start their seasonal decline after Labor Day weekend.
The final chart we wanted to show is the y/y change in gasoline prices going back to 2006. Even after the nearly 15% increase in prices at the pump this year, the national average price is still down over 17% y/y. While the magnitude of the y/y decline has moderated recently, what is most noteworthy about this chart is the fact that prices have been down on a y/y basis for nearly two years now. When you start compounding y/y declines, it really starts to add up!