U.S. households are expected to spend an average of $5,000 on gasoline this year.
Yardeni Research concluded that Americans are paying considerably more at the pump this year, CNBC reported. By Yardeni Research’s estimates, Americans were spending a mere $2,800 last year.
The rapid pace at which gas prices continue to increase drastically affects the estimated annual sum Americans are expected to pay. This past March, Americans were expected to pay an estimated $3,800 at the pump in 2022.
The American Automobile Association (AAA) reported that in March the national average for a gallon of regular gasoline was $4.22. CNBC noted that the average price for a gallon of gasoline during the week of May 16 was $4.59. A year ago, at this time, a gallon of gasoline was $3.04.
“No wonder the Consumer Sentiment Index is so depressed. The wonder is that retail sales have been so surprisingly strong during April and May,” Yardeni said in a note.
Yardeni stated that the inflation-adjusted incomes of most consumers are barely growing and that they have accumulated a decent amount of savings while charging a lot more on their credit cards.
However, Yardeni indicated that the American consumers’ spending habits are somewhat counterintuitive, which might give the economy an illusion of strength.
Yardeni stated, “When we are happy, we spend money. When we are depressed, we spend even more money!”
Gasoline sales actually declined in April from March, as prices temporarily fell before ramping up to record levels in early May. Spending on gasoline in April increased by nearly 37% from a year ago, according to data from the Department of Commerce.
Not only are Americans paying more for necessary products, like gasoline, but their earnings in real wages are falling rapidly.
As inflation continues to spiral out of control, the average hourly earnings for employees on private nonfarm payrolls cannot keep up. These payrolls rose by only 0.3% in April, which was far lower than what was expected by economists.
This 0.3% growth was also far below April’s inflationary increase of 8.3% and March’s 8.5% increase.
According to this data, the real earnings of the American people appear to be falling by multiple percentage points.
Economic experts expect similar economic woes to continue occurring throughout the world as global stock markets continue to hemorrhage money.