We’ve seen a lot of headlines this morning (here, here, and here) discussing gasoline and how prices have been on the rise over the last couple of weeks. All of these headlines are accurate, and since bottoming out back on 2/14 prices, on a national basis jumped 12 cents to $1.81. However, in the context of declines we have seen for several months now, as well as the time of year we are in, recent increases are a drop in the bucket. For starters, take a look at the table to the right which shows the average YTD change in gasoline prices through 3/7. Going back to 2005, which is the first year for which AAA data begins, the average YTD change in prices at the pump is a gain of 9.6% (median: +7.5%). This year’s 9.2% decline is not only the first year that the S&P 500 has been down at this point YTD, but it is also more than 18 percentage points below the average for this time of year.
One factor propelling gas prices in the last couple of weeks has been seasonal. As the table above and the chart below illustrates, the four-month stretch from February through May has historically been the strongest time of year for prices at the pump. Based on historical trends, it would be more noteworthy if prices weren’t up.
Finally, relative to where they were last year gas prices are down 50 cents or more than 20%. Prices have now been down on a year/year basis for more than 20 months (since August 2014), which is eight months longer than the stretch of negative y/y readings back in the financial crisis.