Originally published Thursday, March 20, 2008 at 12:00 AM
Gas consumption drops 1 percent
Across the country, people already struggling with rising food prices, weak wage growth and falling home values are finding ways to manage...
NEW YORK — Across the country, people already struggling with rising food prices, weak wage growth and falling home values are finding ways to manage the soaring cost of gasoline. They're combining errands, sharing rides, eliminating pleasure trips and using public transit more.
In fact, U.S. consumers caused a remarkable 1 percent drop in gas consumption the last eight-week-period over a year ago.
Gas use should be rising 1.5 percent annually just to keep up with the population, according to Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.
The last time a drop that length was recorded was in early 1997.
As gas prices rose to $2 a gallon and $3 a gallon, Americans were expected to trade their sport-utility vehicles or drive less, but the strong economy kept pumps busy. When gas prices hit a record $3.23 a gallon last May, Americans shrugged it off as another temporary spike, but that was before the economy spiraled downward.
Sharply higher prices for food and other basic goods and weak home prices that limit the ability to cash out equity for spending money are wearing consumers down.
"In the past, their budgets weren't being attacked from all sides," said Joel Naroff, an economist and president of Naroff Economic Advisors in Holland, Pa. "People are adjusting not only to the rising price of gasoline, but now the soaring price of food."
Last November, demand in California plummeted by 3.7 percent as gas prices soared past $3.40 a gallon.
Part of the downturn came from low-income consumers staying home or taking public transport, but the sharp downturn in the state's economy played a part, said Chris Thornberg, a former UCLA economist who now runs his own forecasting firm, Beacon Economics, in Los Angeles.
The level at which gas prices force households to cut back is subjective and comes sooner to lower-income families. But there's evidence we're already at a point where average consumers are cutting nonessentials or "trading down" to cheaper brands.
Eventually, economists believe, this downturn in gasoline consumption will bring prices down.
Copyright © 2008 The Seattle Times Company
Bombs, guns found at home of suspect in Officer Brenton's slaying
How an underdog named Mike McGinn took City Hall
Danny Westneat: Lee the Horse Logger found slow wagon shrank tumor
Parents want answers on new Seattle school boundaries
3 Cascade Mountain passes close due to snow; more rain, wind expected Sunday

Mourners gather at KeyArena for slain officer's memorial
Mourners gathered at KeyArena for the memorial service of Seattle police Officer Timothy Brenton on November 6, 2009.
nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
How to tell your office you're gravely ill
Post a comment
nwautos

Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
- Flags were key link to cop slaying, bombings
- Suspect shot as city mourns slain officer
- Bombs, guns found at home of suspect in Officer Brenton's slaying
- Briefs | Soccer: New Mexico suspends hair-pulling player Elizabeth Lambert
- How an underdog named Mike McGinn took City Hall
- 3 Cascade Mountain passes close due to snow; more rain, wind expected Sunday
- Huskies suffer another heartbreaking loss to UCLA
- McGinn pulling away as late ballots come in
- The birth of 'Grunge,' in photos by Michael Lavine
- Using anti-shooter tactics, civilian Army police officer brought down gunman
- U.S. House passes health plan
377 - Bombs, guns found at home of suspect in Officer Brenton's slaying
275 - Decision day for health care in the House
216 - Referendum 71 show's Washington's strategy for marriage equality is working
161 - Grading the game
158 - Beavers open as 10-point favorites against Huskies
92 - How an underdog named Mike McGinn took City Hall
92 - Sounders FC-Dynamo playoff Game 2 thread
81 - Game thread: Detroit Lions at Seattle Seahawks, Nov. 8
74 - Fort Hood shooting suspect had shown troubling signs
74
- Suspect shot as city mourns slain officer
- Flags were key link to cop slaying, bombings
- The birth of 'Grunge,' in photos by Michael Lavine
- Bombs, guns found at home of suspect in Officer Brenton's slaying
- 10 ways to take control of your health
- 10 investing missteps to avoid
- Tlingit heritage helps glass artist Preston Singletary break new ground
- How an underdog named Mike McGinn took City Hall
- How do innovators think?
- Danny Westneat | Lee the Horse Logger found slow wagon shrank tumor





