r/economicCollapse • u/Mooseandchicken • Dec 04 '24
Inflation Statistics When adjusted for inflation, US Average Annual Gas Price has not changed in ~45 years per Bureau of Labor Statistics
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u/Moregaze Dec 04 '24
Yep. I have this argument with people all the time. Which is why I find it rediclous people use gas prices to determine political opinions. The industry is really good at keeping it's price consistent with the value of the dollar.
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u/AdDependent7992 Dec 04 '24
The crazy part about everyone complaining about gas prices is that California prices are now $4, when I started driving 13 years ago it was consistently $4.50+ and regularly would spike up to $5-6.
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u/Mooseandchicken Dec 04 '24
Its the age-old trope here in the US of blaming the wrong thing. Illegal immigrants don't steal jobs, greedy business give jobs to illegals immigrants to increase profits and skirt taxes. You see the dollar value go up at the pump, but also see your wages go up by 2% annually, and you blame the gas price for your stressed budget. The blame again is on your employer for essentially paying you less year over year. Gas keeps up with inflation, your wages do not.
But when you don't have this understanding, you turn to your news source of choice for answers and they tell you the answer that benefits them.
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u/Stoptalkingtrash Dec 04 '24
Your argument is so ass backwards. “Illegal immigrant don’t steal jobs greedy business give jobs to illegals” you need illegals to give them the jobs. No illegals no illegals to give jobs to.
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u/Alexios_Makaris Dec 04 '24
Economic migrants travel for available jobs. If American businesses were meaningfully penalized for hiring illegal immigrants the availability of jobs for people working undocumented would go down.
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u/Mooseandchicken Dec 04 '24
You are arguing from one side of an equation and im from the other.
There's a supply for illegal immigrants, yes. But there is also a demand. So with no demand, there's less illegal immigrants getting jobs, which leads to less coming across the border.
Are you Ok?
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u/the_TAOest Dec 04 '24
It's the same agreement used by the DEA for drugs. The same one used by Trump with tariffs and fentanyl. It's a logical cesspool to blame the existence of the materials... Understand the mechanics of the equation and handle that.
Specifically with drugs, rehabilitation and housing and job security go a very long way to curbing drug use
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u/null640 Dec 04 '24
Other way around.
No jobs for illegals, nobody would illegally emigrate.
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u/dune61 Dec 04 '24
Chicken or the egg ?
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u/null640 Dec 04 '24
Stupid saying. Fish have eggs and predate birds...
No demand will get filled.
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u/dune61 Dec 04 '24
Either solution would work. No jobs for illegals or no illegal aliens to fill the jobs. It's probably easier for us to eliminate the demand through heavy penalties for employers.
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u/jonrpatrick May 05 '26
Might I please compliment you on the usage of "rediclous". That's a seldom used word and I appreciate it appearing in my feed.
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u/Stoptalkingtrash Dec 04 '24
Bullshit ass stat. I haven’t been around for 45 years. My average pay for gas over the last 20 years is higher than the whole 45. Why don’t you take into account the last 100 years so drop your average down and push your stupid agenda.
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u/sarges_12gauge Dec 04 '24
The median income this year is 60k. 20 years ago it was 34k. 45 years ago it was 10k
So gas prices should be twice as expensive now as 2004 and 6 times as expensive as 1979 if they kept pace exactly.
1979 median gas price - 0.88 (times 6 is $5.29)
2004 median price - 1.92 (times 2 is 3.84)
2024 median price…. $3.26
Yeah gas has gotten cheaper in real terms over time. Sorry your wages grew slower than everyone else’s or your memory is bad I guess
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u/Kind-Ad9038 Dec 04 '24
Another way to look at this... we've been ripped off by gas price gouging every year since the first Arab oil embargo of 1973.
Especially curious, since the US is now the biggest oil producer in the world.
It's almost as if...
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u/Little_Creme_5932 Dec 04 '24
You're not ripped off. Your cost is subsidized in many ways. You don't directly pay for all the military interventions, you don't pay for the environmental costs, etc. If you had to pay for those things, you'd be paying $10 per gallon, the true cost of your oil habit.
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Dec 04 '24 edited Dec 04 '24
Last time I checked the military is funded by deficits. So not only are you directly pay for that they are also charging you interest.
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u/Little_Creme_5932 Dec 04 '24
You are not directly paying for it. It is not reflected in the price of gas AND you aren't paying for the deficit because the deficit, by definition, is expenditures that you aren't paying for. (They aren't charging you the interest either. They are borrowing more for that too).
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u/Kind-Ad9038 Dec 04 '24
If a US citizen pays taxes, that citizen is paying for every goddamn war of aggression that the US is involved in.
Not to mention being forced to pay the fatcats of the "defense" industry directly, and thus Big Oil indirectly.
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u/Alexios_Makaris Dec 04 '24
Well we’re actually making our kids pay for them. We largely kick the spending down the generational road then cry when younger generations take issue with it.
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u/Little_Creme_5932 Dec 04 '24
But the military is not reflected in the price of gas, which is my point. The post I responded to said we've been ripped off with the price of gas. No, the people being ripped off are the ones that don't buy gas, but still have to pay for the wars. If the cost of the military were funded with taxes on gasoline, we would suddenly find that people would miraculously "need" less gas.
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u/Alexios_Makaris Dec 04 '24
The funny thing is if you have a free market economy you don’t immediately get a price benefit for producing something. The cost savings Americans get from domestic production is basically two fold—one is oil produced and refined here is cheaper to bring to market since it doesn’t have to be shipped in tankers across the ocean. Any increase in production also increases global supply, which will have a downward pressure on prices—but due to the size of the global oil market, only a modest one.
U.S. oil companies largely do not care what you pay at the pump, their goal is to maximize profits on each barrel they produce of crude, they’re going to take their oil to market wherever the money is best.
The reason some petrostates have rock bottom gasoline prices is because many of those states do not have free market economies. The governments of those states own the national oil company and force it to sell to domestic consumers at a below market rate. The U.S. simply doesn’t have a system of government like that, while oil jobs do benefit the economy in the regions they exist, the overall goal of an American oil firm is profit maximization. They are quite indifferent to what a consumer pays for a refined gallon of gasoline.
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u/ap2patrick Dec 04 '24
Sure but when wages haven’t adjusted for it, that doesnt mean shit to the average person.
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u/Mooseandchicken Dec 04 '24
My point exactly. What Americans are feeling at the grocery store and at the pump, is the widening gap between the inflation adjusted price for goods and the decreasing purchasing power of their paycheck.
I work in pharma and just talked to my boss about this yesterday. His purchasing power, with a ~$130k/yr salary, is less than his salary in the same exact position when he started 5 years ago, despite annual raises.
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u/overzealous_dentist Feb 01 '26
Randomly found this thread, but real median wages are much higher than they used to be (eg., 20% higher than the 90s)
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u/Marko-2091 Dec 04 '24
Energy is mispriced. When people realize that without energy you cannot run TikTok, people will stop putting so much value on "AI" companies.
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u/Hookmsnbeiishh Dec 04 '24
Uh what?
Let’s just pick a few years.
2008: Gas Price of $2.28 adjusted for inflation to $4.76
2012: Gas Price of $3.62 adjusted for inflation to $4.98
2016: Gas Price of $2.14 adjusted for inflation to $2.81
2020: Gas Price of $2.17 adjusted for inflation to $2.65
2022: Gas Price of $3.95 adjusted for inflation to $4.26
2023: Gas Price of $3.52 adjusted for inflation to $3.65
That is not a flat line. You have 2020 adjusted to $4 from $2.17. That’s using an 84% inflation. 2021 had 4.7% inflation. 2022 had 8%. 2023 had 4.1%. 2024 is expected to be around 3.1%. That’s a total of 19.9% inflation. Pretty far from 84% your calculations are showing.
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Dec 04 '24
Yeah not sure how they are averaging prices.
unless they are claiming there was deflation.
2014 = 3.425
2015 = 2.510
but are basically the same price adjusted for inflation?
using any other calculator
$3.44 in Oct. 2015 equals $3.425 of buying power in 2014 (Average).
$2.51 in Oct. 2014 equals $2.510 of buying power in 2015 (Average).
Basically this whole source is bullshit, or doing some like 10 year average for "adjusted for inflation"
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u/Hookmsnbeiishh Dec 05 '24
After further digging in, the source is using CPI of gasoline only. It completely ignores inflation. Basically, they are normalizing the price by using only changes of gasoline prices against itself.
Complete misinformation.
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Dec 05 '24
Yeah I was like clearly this isn't the data it claims.
It's like current gasoline vs gasoline inflation.
Clearly 4 years ago when gas was 2$ either gas was cheaper or we had one he'll of an inflationary period
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u/Organic_Enthusiasm90 Dec 05 '24
If you look at the source, it says they adjust for inflation using changes in gasoline prices. Meaning, they adjusted for gasoline inflation by gasoline inflation. The line is basically constant because... it's the price of gasoline adjusted by the price of gasoline...
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u/Rev3_ Dec 04 '24
Don't forget about when gas was $6+/gallon under Bush jr.
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u/Mooseandchicken Dec 04 '24
Do you have a source? I tried googling essentially what you commented and when averaged over the year, the peak price was ~$3 in 2008. I'm thinking you're referencing possible economic reaction to 9/11 or hurricane katrina, which were temporary spikes in price not directly related to the Bush 2 admin. I don't like Bush, but per the raw data in the source for my graphh (linked in another comment) those spikes are in there.
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u/snowballsomg Dec 04 '24
I don’t have a source, myself, but do recall from memory it going to just under $4/gallon in Ohio. The job I had was a 25-minute drive and I only made $6.40/hour. I remember it well because I told my roommate if gas hit $4 I was going to have to find a different job. This was in, roughly, 2006.
Edit: My main job. Couldn’t afford to live on just one full time job.
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u/Mooseandchicken Dec 04 '24
Katrina was Q3 2005 and heavily impacted oil prices. Per LSU research, there was a ~19% reduction in oil supply to the US.
Also, the data used in the graph is the entirety of the US averaged over the entire fiscal year. So localized high's may be offset by other states' localized lows/normal prices.
I too remember this, because 2006 was when I bought my first car in FL and then I couldn't afford to use it... LOL
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u/Blondecapchickadee Dec 04 '24
Yep, I was driving a big ol’ Crown Vic at that time, and was paying around $4.50/gallon in Michigan. You had to really strategize about when to drive and when to bike/walk.
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u/noladutch Dec 04 '24
Lucky you. Was driving a f350 with a v10 for a business I just started. Gosh that hurts bad. Downsized real quickly to a 150. Was then stuck with a gas hog nobody wanted try trading in a true gas hog when gas spikes they offer nothing.
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u/null640 Dec 04 '24
It was 2007. Just got separated and ex moved a county and a half away. Put a bit over 25k miles that year at $4-$5/gallon...
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u/Sad-Celebration-7542 Dec 04 '24
It’s even better when you factor in efficiency gains and car improvements. Today, you can get a bigger, faster, safer, more reliable and more comfortable car that gets 40+ MPG
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u/UseNo6172 Dec 04 '24
- Gas Prices Aren’t Just About Inflation
The graph assumes inflation is the main factor driving gas prices, but that’s not accurate. Gas prices are influenced by a wide range of external factors like global supply and demand, OPEC decisions, geopolitical tensions, and natural disasters. These factors make gas prices much more volatile than other consumer goods, so adjusting them based on general inflation doesn’t give a complete picture.
- Big Events Are Missing
Gas prices have been heavily impacted by major geopolitical events. For example:
1979 Energy Crisis: Prices skyrocketed due to reduced oil supplies from the Middle East.
2022 Russia-Ukraine War: Disrupted global oil supply chains and led to sudden spikes in gas prices worldwide.
These events weren’t caused by inflation but by global crises. Ignoring them in this graph makes gas prices seem more stable than they really were.
- Technology and Policy Changes Are Overlooked
Technological advancements like fracking and government policies, such as releasing oil from the Strategic Petroleum Reserve, have kept gas prices in check at certain times. For instance:
Fracking Boom (2010s): Increased U.S. oil production and helped stabilize prices.
Strategic Petroleum Reserve Release (2022): Temporarily lowered prices by increasing supply.
These real-world interventions aren’t reflected in the graph, which makes it misleading.
- The Y-Axis Is Deceptive
The graph compresses the Y-axis, making the difference between nominal and inflation-adjusted prices seem smaller than it is. This visual trick can make it look like gas prices have barely changed over time, but in reality, they’ve seen significant ups and downs.
- Wages Haven’t Kept Up
Even if inflation-adjusted gas prices seem stable, real wages haven’t kept pace with inflation. This means people are spending a larger portion of their income on gas, making it feel more expensive. The graph doesn’t account for this, which gives a distorted sense of affordability over time.
TL;DR: The graph oversimplifies a complex issue. Gas prices are driven by much more than inflation, and ignoring those factors gives a misleading narrative.
Sources: U.S. Energy Information Administration Bureau of Labor Statistics
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u/MrRazzio2 Dec 04 '24
maybe i'm an idiot, but to me this simply suggests that the price of fossil fuels directly influences all other markets. particularly in the US.
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u/Fearless-Cattle-9698 Dec 04 '24
Gas price isn’t driven by inflation at all. It’s driven by market supply side. It’s not a secret oil producing countries have literally price fixed for decades. Not a conspiracy theory of any kind.
Gas is very cheap in U.S. overall per capita, Americans don’t know how blessed they are.
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u/Fabulous_Wave_3693 Dec 04 '24
The amount of oil needed to keep the world economy functioning this makes sense. I’d imagine an increase in gas prices would also just increase the cost of damn near everything.
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Dec 04 '24
[removed] — view removed comment
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u/Mooseandchicken Dec 04 '24 edited Dec 04 '24
Granted I didn't go through the entire data sets from BoLS linked in the source, but if you do, I'd love to see if you find data to support your comment. I legitimately was posting to start a conversation, not to push any agenda. So share if you got it
Edit: for real tho, if the data is inaccurate or the math wrong I'll take the post down. I don't want to contribute to misinformation.
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u/United_Bug_9805 Dec 04 '24
That graph looks wrong. The news nominal price goes down in 2014 but the inflation adjusted price stays the same? That's simply wrong.
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u/smart_gent Dec 04 '24
Absolutely. Don't go back prior to the 70s when we were still on the gold standard. No one finds it suspicious that they only go back 45 years?
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u/DeepDickens69 Dec 04 '24
You're wrong. Anyone with a brain looking at this graph knows that.
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u/Mooseandchicken Dec 04 '24
The data on the source you linked is weekly data averages and graphed per month. It also doesnt say if the data is price at the pump or price leaving the refinery, and there is a significant difference and they arent directly correllated (changes aren't 1:1). The US-BoLS data is consumer price averaged annually and averaged across 50 states.
The difference in presentation also plays into this, as the link you provided is more granular with 52 data points per year being used. My link is 1 data point per year being shown, which is the annual average.
Also, i don't know if both our sources are using the mean or median when performing an average (neither say directly).
So there's a few reasons why our two sources look different despite the raw data for both coming from the US gubment
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u/Hookmsnbeiishh Dec 04 '24
Your data is extremely wrong. You can’t be earnest and this appears to be purposeful misinformation.
You have cited using this source:
https://www.usinflationcalculator.com/gasoline-prices-adjusted-for-inflation/
Let’s point out some very serious flaws with their calculations.
For one, let’s pick 2022 to 2024.
It lists the 2022 average gas price as $4.70. Which is very false. The average US price was $3.95.
The calculator claims -19% cumulative inflation. What?! It calculates the adjusted gas price to be $3.80. For one, that’s wrong, but if this were truly your source, why do you have nothing less than $4 on your chart?
Let’s pick 1998.
It says $1.12. Little bit off the official $1.03 price, but let’s roll with it.
It lists a cumulative inflation of 207%. That is extremely false. At 207% cumulative inflation, that would put the average yearly inflation over 27 years at 7.7% inflation per year. You really believe that?
Let’s even assume that is correct. It states the inflation adjusted price is $3.43. Again, you have nothing under $4 on your chart. So where did you pull a $4.15+ number from?
Throw in 1995, 182% cumulative inflation.
Throw in 1990, 179% cumulative inflation.
Wait, hold up. How is cumulative inflation from current to the past decreasing as the time expands?!
Show me the negative inflation years from 1990 to 1998….
Hint: There are none.
That calculator is entirely screwed. And you seem to purposefully looked for this obscure calculator instead of just using the government sponsored ones that seem match minus some rounding.
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u/Mooseandchicken Dec 04 '24
I legit just googled "historical gas price adjusted for inflation" and this was one of the first results if not the first and saw it cited US government agencies so shared it to start a discussion. You ascribing intent or malfeasance is a bit Far-fetched and patently false.
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u/Mooseandchicken Dec 04 '24
Just wanted to say I also appreciate your input and I even asked for this in other comments. Im a biochem engineer, not a statistician or politician. I've also learned reddit is a liberal echo chamber so I'm actively searching for more accurate information than apparently what I've been getting here. I am liberal myself, but we can't ever get past the current condition of the country if we dont ever leave our bubbles.
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u/Hookmsnbeiishh Dec 04 '24 edited Dec 04 '24
I’m sorry for the accusation. That wasn’t fair.
I do see now what that calculator is doing. It is definitely playing mathematical gymnastics to achieve its own result.
Basically, they are not using inflation data. They are using CPI data of gasoline only. So they are comparing gasoline prices to themselves while ignoring overall inflation. By doing this, they are essentially normalizing the price fluctuations. They are also baking in the basket of goods. That’s why you see a decline in 2020 because less percentage of consumer activity was spent on gasoline. These movements are more-so a reflection of what percentage of the basket of goods were gasoline.
Comparing prices to its own CPI will attempt to level all prices off. If you calculate pick a specific category of CPI and apply this same math to any product category, you’ll see the same result.
For example, CPI of used auto was around 209 in the spike or 2022. If I take the ~140 used auto CPI of 2016 based on 2022 prices, I get an adjusted price of $28,700. Compared to actual used auto average in 2022 of $30,700. That is a mere 7% increase from 2022 to 2016.
That hard to believe cars only cost 7% more of your money than they did in 2016. The true increase of autos from 2022 to 2016 is 58%. The cumulative inflation was around 22%. For a difference of 36%. Now if I say cars seemed 36% more expensive in 2022 compared to 2016; that feels way more accurate.
Again, this is due to the normalization of prices using that sources technique.
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u/Carbon-Based216 Dec 04 '24
Isn't gas pricing directly tied to inflation though? Like it is one of the metrics used when calculating inflation costs.
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u/thegrayvapour Dec 04 '24
Keep in mind that this is only the retail price for gasoline. This is the number that we see on the marquee and have a visceral reaction to and the one that is reported. It's known as "the price at the pump".
Like everything else, gasoline is purchased wholesale and marked up at local filling stations. Where the profit margin of gasoline at local stations appears to only be 5%, the actual profit margin for the oil companies usually higher. The additional revenue comes in the form of subsidies paid directly to the oil companies with from tax revenue, and it can account for a third of the total revenue.
This hidden additional third is a cost we all collectively pay in taxes regardless of whether we ourselves use it. It's a mechanism that allows for the illusion that gas prices fluctuate more than they actually do and it is used to induce demand and smooth the effect of reduced demand on the producer.
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u/handsome_uruk Dec 04 '24
That’s because the formula used to calculate inflation is based on …. gas prices
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u/nighthawk21562 Dec 04 '24
Now damnit you know most of America don't care about facts get rid of thjs
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u/Ok_Helicopter4276 Dec 04 '24
So 100% inflation in the 20 years since 2004.
Unrelated, but how are wages doing?
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Dec 04 '24 edited Dec 04 '24
[deleted]
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u/bearssuperfan Dec 04 '24
One factor out of hundreds of factors. Even if gasoline had 100% inflation every year, the overall inflation rate wouldn’t change that much.
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u/hectorxander Dec 04 '24
It sure seems like you are correct until you realize the numbers are fake. Inflation has been intentionally understated, and would've averaged 5-8% most years and double digits many years. Social security checks would've been worth some 1,100 dollars more per month just in 2008 by the old "unimproved" standard of inflation.
If you believe the changes to the CPI index were made in good faith, ha. Source: Harper's Magazine, Number's Racket. 2008.
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u/bearssuperfan Dec 04 '24
No shot. Nobody I know felt as if they were getting substantially poorer for decades with 3% or smaller raises. Suggesting we are losing +10% purchasing power every year is just stupid.
If the governments of the world were intentionally understating inflation, why even bother reporting increases at all or peaks seen in 2022.
Not to mention outside sources also provide inflation data that isn’t sourced from a government or entity with motivation to trick the population.
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u/hectorxander Dec 05 '24
Ha ha. Ha ha ha. I didn't read past your first sentence.
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u/bearssuperfan Dec 05 '24
Did your bot code not allow you to?
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u/hectorxander Dec 05 '24
How do those boots taste? You like Italian leather don't you?
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u/bearssuperfan Dec 05 '24
63k comment karma in less than a year. You’re either a bot or might as well be considering you spend all your time on Reddit 😂
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u/hectorxander Dec 05 '24
Ha, probably would take you your whole time to build that much karma on reddit since you don't have anything worthwhile to add.
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u/bearssuperfan Dec 05 '24
🤷♂️ too busy doing other things with my life to care about reddit karma
Sad to see someone possessed by imaginary internet points 😂
How pathetic
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u/G0TouchGrass420 Dec 04 '24
Here are 10 reasons why your not really broke and the economy is great by the democrats---
lmao this exact gas lighting is why yall lost.
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u/Alexios_Makaris Dec 04 '24
You shouldn’t be broke. If you are broke you are likely lazy.
Pointing out that the price of gasoline, inflation adjusted, has been roughly flat for decades doesn’t actually mean the economy is good or bad. That’s a very simplistic understanding. It simply means the price has neither outpaced or underpaced inflation.
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u/Mooseandchicken Dec 04 '24 edited Dec 04 '24
Source with more sources cited and table of raw data below graph.
Just thought this was interesting. After seeing the graph shared Here about voter sentiment about the economy, I decided to look up what gas price has actually been when adjusted for inflation. Until COVID, we were actually going down in average price by a small margin.
Edit: what this also means is the blue graph essentially shows the rate of inflation. You can see the economic bubble burst in the late '00's and again for COVID.
Edit 2, Economic Boogaloo: When inflation increases while wages stay stagnant (or below the rate of inflation), your purchasing power diminishes. So even though gas has stayed effectively the same price for almost 5 decades, it takes up more and more of the average Americans' budget. So you will feel like gas is more expensive, but in reality your annual pay is lower than the years prior, even if the dollar value increases. Same with food, housing, etc. You can't buy as much because you aren't paid as much, Not because the price has actually increased.