By New Deal Democrat
As you all know by now, I think one of the big hidden stories in the economy for the last decade has been the Oil choke collar, where growth causes energy prices to spike, causing growth to slow, causing energy prices to decline, meaning that energy prices have acted as a governor limiting US economic growth in particular.
Several years ago, I suggested that trends in exploration, efficiency, alternative fuels and conservation would finally have enough combined impact that the choke collar might start to disengage in 2013. It looks like that is happening.
In the last few days, gas prices have declined to the point where gas is no cheaper than at any point in 2011 and 2012. It is at a near 3 year low, as shown on this graph from Gas Buddy:
Gas prices started rising on a secular basis from less than $1/gallon in early 1999. As the below graph of YoY price changes shows, with the exception of the bottoms of the last 2 recessions, and the near recession of 2006, 2013 has marked the biggest YoY price decline since the secular bottom:
Here's a close up of the last couple of years,showing that prices have been lower most of this year than they were at the equivalent time one year ago:
As a result,YoY inflation is likely less than 1%, the lowest reading outside of the great recession in 50 years. This also means an increase in the real wages of the median American working household.