Energy Price Fiasco Causes Multiple Problems for Americans
Drahuschak, Gregory M., Tribune-Review/Pittsburgh Tribune-Review
According to statistics from the U.S. Energy Information Agency, individual vehicles in the United States are driven 12,578 miles annually. Consumers are spending more than $2,500 annually on gasoline for each vehicle, compared with $1,320 two years ago.
The extra $3.23 a day we are paying to fuel the family car today vs. in 2006 was the topic of great debate when, over two days at the end of the week, the price of crude oil rose more than $16 a barrel.
Accounting for a second car, which the average family reportedly now owns, that has doubled the typical annual gasoline budget drag just over the last two years.
There might not be much worry if the rising price of gasoline was the only factor impacting consumers.
A quick trip to a grocery store provides a list of hundreds of other items that increasingly are nipping away at discretionary spending power. In one way or another, many of these higher prices find their roots in the cost of energy. And, of course, there is the cost of natural gas and heating oil to drain our wallets even more.
Last Thursday, surprisingly robust retail sales prompted a large gain in the stock market's major averages. Wal-Mart said that it cashed about $350 million in tax rebate checks. Some of the cash must have found its way into cash registers at the nation's largest retailer because the company reported May sales increased 3.9 percent, which was more than twice the rate of increase that had been expected. The company's forecast of its potential June sales was better than previously expected.
Wal-Mart's upbeat sales report, however, had a dark side to it.
Wal-Mart's chief financial officer said, "Many of our customers have to live from paycheck to paycheck, and what we see is that the amount they are spending on basics -- and those are just consumables and lower-end kinds of products -- is a big portion of the total basket."
Considering the recent energy price increase, as well as increases in other must-buys, one way or another, the entire amount of the tax rebates is going for essentials instead of purchases of LCD televisions, the family vacation, new golf clubs or other items that might have spawned and given the economy a boost. …