See How Americans Are Navigating Higher Energy Costs on Every Front: Borrowed Costco memberships, fewer nights out and skipped road trips. ‘You better watch your account to the penny’ by Rachel Wolfe of The WSJ. Excerpts:
"Consumers around the country say they are rejiggering their routines in efforts to cut their energy usage at home and on the road. They are also starting to cut back on discretionary purchases to make up for rising costs elsewhere. For an economy driven by consumer spending, such changes in behavior matter.
High prices for electricity and natural gas used for heating and cooking already have alarmed consumers and played into local elections. For the past year, falling gasoline prices acted as a shock absorber, offsetting an 11% year-over-year increase in the price of natural gas and 5% rise in electricity. That reprieve ended this month, and could last as the war with Iran drags into its fourth week.
The national average for a gallon of regular has just about reached $4—climbing more than $1 in the past 30 days."
"Although $4 today, adjusted for inflation, is less than in previous price spikes, the last time gas hit a national average of $4 a gallon in 2022, it helped trigger a broader pullback in discretionary spending."
"California has some of the nation’s highest gas prices because of taxes, environmental requirements and a lack of refinery infrastructure in the state, which has helped push the state’s residents toward electric vehicles."
"The U.S. has become less energy dependent, and Americans consume less gasoline relative to their inflation-adjusted incomes than during previous price spikes, thanks to increased energy efficiency and generally rising incomes."
"consumers expect the bump at the pump to precipitate broader inflation, as has happened in the past."
Next see The Low Cost of High Gasoline Prices by Mitch Zimmer. Excerpts:
"In May 2018 . . . gasoline prices were up roughly 50 cents from the previous year."
"My family routinely drives 600 miles round trip to a house in the mountains for Memorial Day."
Just how much was that 50 cents a gallon going to cost everyones?
"My car gets 30 miles per gallon, so it would require 20 gallons of gasoline for a 600-mile trip. The more expensive gasoline would add $10 to the cost of the trip."
His point was that the price increase was not all that costly. Even if gas was up a $1, it would only increase the price of the trip by $20.
Then see Postal Service to Impose Its First-Ever Fuel Surcharge on Packages: The 8% fee, to cover rising fuel and transportation costs, will be applied to packages but not the mail, as the agency looks to stabilize its finances by Esther Fung of The WSJ. Excerpts:
"The U.S. Postal Service plans to impose its first-ever surcharge on packages to cover the rising cost of fuel"
"The 8% surcharge will begin on April 26"
"Other parcel carriers, including FedEx and United Parcel Service, have imposed fuel surcharges for years"
"Diesel prices reached $5.38 a gallon this week, up 51% from a year earlier."
"Amazon.com is planning to sharply cut the number of packages it ships"
When the price of a resource rises, supply shifts to the left. The price of the good or service rises and quantity falls. We see this in the article.
Related post:
Stagflation, Recession? Probably Not (2026)
"The economy has grown more resilient to oil shocks, and a productivity renaissance is under way, helped by artificial intelligence. Both should help sustain growth and cushion cost pressures."
"The U.S. consumed 4% less gasoline in 2025 than in 2007, while producing 42% more goods and services (as measured by gross domestic product, adjusted for inflation). The share of households’ consumption of energy, including electricity, natural gas and gasoline, fell from 5.7% in 2007 to 3.7% last year."
"the shale revolution has turned the U.S. into a net exporter of petroleum and major exporter of liquefied natural gas. That means the hit to consumers is offset by a boost to producers."
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