Category Archives: Economics

Who uses our Fuel?

Economics, Environment, Government Issues

In our country, the focus seems to be on reducing the use of petrol in passenger vehicles. While this segment represents a significant portion of our consumption at about 140 billion gallons per year, it does not represent the majority of usage. Our airline industry uses over 100 billion, Ocean freight over 100 billion and commercial land freight uses over 53 billion. While there are other usages these four represent the vast majority. While we are making significant progress with both EV technology and application we must recognize that we are only dealing with about a third of the issue.

The solutions for Ocean Freight seem to be “decarbonization”:  https://old.geodis.com/us/blog/air-ocean-transport/reducing-environmental-footprint-ocean-freight. 

The focus of the airlines seems to be on a sustainable fuel source that reduces fossil fuel consumption, but does little to deal with the carbon emission issue: https://www.4air.aero/saf-map?gclid=Cj0KCQiA3uGqBhDdARIsAFeJ5r2HXEbjZOdCiPRkTKaHeChZef0mvM0ZBgUoMMJQF4ZQu0EUkK_yRxAaAk8LEALw_wcB

Note: We export about ½ of the oil we produce. I’m depressed.

The Price of Fuel

Broken in the USA, Economics, Government Issues

The Price of Fuel

The cost to fuel our cars has been fluctuating wildly and has recently been declining. The other day I noticed that Casey’s had it for $2.999  and I could purchase it the day before in Springfield for $2.689. I got to wondering how that price was compared to when I went off to college in 1963. I remember purchasing it for $.299 in Fayetteville. Wow, it is 10 times more now. If you think it is high you have not been to the West Coast Recently. A couple of weeks ago while in San Diego I paid $5.689. I got out the trusty spreadsheet and backed down that $3 price to 1963 adjusting for inflation. I was shocked as the calculation showed that $2.999 today has the same buying power as $.269 in 1963. So fuel is less costly today. It gets even better. I found a chart that shows the average MPG for all the cars in the USA. In 1963 it was 19 MPG and today it is 31. So our cost per mile (in terms of buying power) has decreased by about 45% when you factor in both inflation and increased efficiency.

Now for the bad news. I checked our ability to pay. I started by checking our economy’s performance over that period using GDP and adjusting it for inflation again. GDP increased by about 380%. Then I checked the median family income adjusted for inflation and found that it had only improved by 21% over 60 years. By comparison, the economy has boomed, but not our ability to pay. Any thoughts about where the 359% improvement in our economy went?

The Economy in 2023

Economics, Education, Government Issues

The Economy in 2023

How was the economy during 2023? Looking at six key economic indicators it appears the results were not so bad compared to an average of the prior 20 years. Real (inflation-adjusted) GDP increased by 2.5%, a bit above the 2% average. The inflation rate at 3.7% is still above the 2.5% average but improved significantly vs 2022. Unemployment at 3.4% is an all-time low. The S&P 500 improved 9.4% over the 12 months while the NASDAQ improved a whopping 43.4%. The wage increase was almost double the average. Not a bad year.

YearReal GDPInflationUnemploymentS&P 500NASDAQAVG wage
Growth * RateRate% change% changeIncrease *
20021.70%2.40%6.00%-22%-31.53%-1.40%
20032.80%1.90%5.70%29%50.01%0.50%
20043.90%3.30%5.40%11%8.59%1.40%
20053.50%3.40%4.90%49%1.37%0.20%
20062.80%2.50%4.40%16%9.52%1.80%
20072.00%4.10%5.00%54%9.81%2.5%
20080.10%0.10%7.30%-37%-40.54%2.2%
2009-2.60%2.70%9.90%26%43.89%-4.1%
20102.70%1.50%9.30%15%16.91%0.3%
20111.50%3.00%8.50%32%-1.80%1.6%
20122.30%1.70%7.90%14%15.91%0.8%
20131.80%1.50%6.70%1%38.32%0.5%
20142.30%0.80%5.60%12%13.40%1.3%
20152.70%0.70%5.00%22%5.73%0.8%
20161.70%2.10%4.70%-4%7.50%-0.6%
20172.30%2.10%4.10%22%28.24%1.5%
20182.90%1.90%3.90%18%-3.88%0.7%
20192.30%2.30%3.60%31%35.23%1.5%
2020-3.40%1.40%6.70%18%43.64%6.2%
20215.70%7.00%3.90%29%21.39%3.2%
20222.70%6.50%3.70%18%-33.10%2.6%
20232.50%3.70%3.40%9.4%43.42%2.1%
Average2.0%2.5%5.8%16.9%11.4%1.1%
w/o 2023
* Inflation adjusted

One more item to consider is the price of gas. The price of regular gas declined by 12% from December 2022 to December

 2023. Considering inflation adjustment, the gas price is no higher today than 20 years ago.