Data published by AAA on Thursday showed that the average price for gas was $3.99 per gallon for the week prior - about 20% less than its peak at $5 a gallon in mid-June.
The spread of prices has been highly uneven: AAA spokesman Andrew Gross told the Washington Post that more than 60% of the nation’s gas stations sold regular unleaded gas at less than $4 a gallon, with the average being held higher by states like California, Nevada, Alaska, and New York that have higher prices. In the Golden State, which by law supplies its own gasoline, the average price per gallon was $5.38 on Wednesday.
According to US Energy Information Association (EIA) data, gas production and imports are only modestly higher than where they were in March, although lower than where they peaked in June. However, the higher prices have kept demand down as well, with people finding ways to drive less or to save gas, including postponing vacations.
Last month, US President Joe Biden flew to Saudi Arabia, a leader of the OPEC+ petroleum cartel and one of the world’s largest oil exporters, to beg for an increase in oil output to ease the damage to the US economy. Crown Prince Mohammed bin Salman, a common target of Biden’s criticism, sent him home empty-handed, and later only modestly increased oil exports.
Petroleum prices were an important factor in the US reaching record levels of inflation this year, although the dollar was already depreciating several months before Russia launched its special military operation in Ukraine. A new report reflecting July numbers was released by the US Bureau of Labor Statistics (BLS) on Wednesday revealing the first decline in inflation in several months.
The BLS’ consumer price index report, which reflects on commodity prices as compared to a year prior, showed an 8.5% increase for July 2022 as compared to July 2021. While the number is still among the highest it’s been in the past 40 years, it is a noticeable decline from the June high of 9.1%. The Federal Reserve, the US central bank, has been steadily and aggressively hiking interest rates in an attempt to rein in inflation, albeit at the risk of stalling investment at the same time.
A leaked memo by Bank of America executives dating to June revealed that rather than mourn an economic downturn, corporate investors would celebrate rising unemployment. That would blunt the trend of rising wages and undercut the basis for significant labor actions over the last two years, which have seen labor unions make significant gains in new sectors of the economy, especially the service industry.
The Commerce Department’s Bureau of Economic Analysis also reported recently that gross domestic product had decreased by 0.9% in the second quarter of 2022, following a 1.6% decrease in the first quarter. By standard economic definitions, the US has entered a recession, even if US President Joe Biden finds it politically inconvenient to admit it.