Gas Prices Won’t Stop Breaking Records

Number of the Day: The most relevant or interesting figure in personal finance

5

That’s how many times the price of gas has set new all-time highs since the Russian invasion of Ukraine, showing the war’s heavy impact on household budgets and the U.S. economy.

A gallon of regular gas averaged $4.43 nationwide on Friday, breaking an all-time high for the fourth day in a row, according to data from AAA going back to 2000. Before this week, the previous record was $4.33, set on March 11, after the invasion in late February drove up the price of both oil and gas (which is made from oil). Prices fell some after the U.S. released oil from its strategic reserve, but that downtick proved to be temporary. Disruptions to the supply of Russian oil stemming from the war and Western sanctions against Russia—a major supplier—have kept crude oil expensive.

Consumers are feeling the impact of gas prices all the more as they grapple with overall inflation running near its highest level in decades, as well as other problems like stock market losses and disruptions to the supply chain that have made products—including baby formula—hard to find. Inflation in particular seriously crimped consumer confidence in early May, a survey by the University of Michigan showed Friday. 

The university’s Index of Consumer Sentiment measuring how people feel about their own finances and the economy fell to a fresh low since 2011, undoing an April uptick that coincided with the short-lived reprieve in pump prices. (Consumer confidence is an important economic indicator because it shows how willing people are to spend, and consumer spending is the main engine of economic growth.) Higher gas prices were likely a big part of the early May downturn, economists at Wells Fargo said.

“It is tough to find a silver lining for consumers so far in 2022,” Tim Quinlan and Sara Cotsakis of Wells Fargo Securities said in a commentary. “The pain at the pump is back in May.”

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