It’s become an annual tradition: As the temperature rises, so does the price of gasoline. But—dare to dream—this summer may different.
Why? While road trips account for a big part of the increased demand each summer, lately there are still way fewer people using their cars for work—because they’re out of work—reports the WSJ:
First, demand is still running 0.5% below last year’s level and 3.1% below 2007’s level, before recession struck. And while many Americans apparently like to spend summer behind the wheel, the main reason to drive in any weather is for work. In the 2001 National Household Travel Survey, the latest published, commuting accounted for the largest share of vehicle miles travelled, at 27%. Unemployment is still nudging 10% and the latest ADP survey of private payrolls showed a surprise drop.
Finally! An upside to high unemployment rates. They had to be good for something, right?
One other factor: Even though the economy was in the dumps last summer, drivers were thrilled simply to not be paying $4 a gallon, like they were forced to in the summer of 2008. There will be no such head games played at the pump in the coming months, and demand may be weak as consumers continue to cut back on expenses wherever they can. This summer, it won’t feel like you’re getting a deal unless prices drop under $2.50 a gallon, which is highly unlikely.