Labor Day is now less than a month away and with many schools around the country starting back to school in the next couple of weeks, the Summer driving season is starting to wind down. With that in mind, we wanted to take a look at where gas prices currently stand as well as how those prices compare to prior years. According to AAA, the current national average price of a gallon of gas is $2.36 per gallon. While that is up considerably from this point last year, there have only been two years (including 2016) where gas prices were lower at this time of year than they are now. The only other year was 2005 when the national average price was two cents less at $2.34. As shown in the left table below, with a YTD increase of 1.0%, there hasn’t been a single year since 2005 where prices saw a smaller YTD gain through August 8th.
The chart below to the right compares the performance of gas prices so far this year to a composite of its performance in all years since 2005. The pattern for gas prices so far in 2016 looks nothing like the ‘typical’ pattern that we have seen in prior years. Whereas prices are typically up over 20% YTD at this time of year, this year they are barely breaking even. The main reason for this year’s shortfall is that prices never saw the seasonal increase in the Spring that is typical. Looking ahead, prices typically decline sharply after Labor Day, but since prices never ran up in the Spring, perhaps they won’t see the typical decline in the fall. Regardless of what happens going forward, the fact that prices have essentially seen no gains YTD has created a small windfall for consumers.
Finally, the chart below shows the y/y change in average gasoline prices going back to 2006. With an 11% y/y gain relative to this time last year, the rate of change is positive which is a change from most other periods in the last two to three years, but it is well off the rapid pace of increase we saw earlier this year when the y/y changes were working off of a very low base from the 2016 lows.