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May 15th, 2008

Cost of expensive gasoline measured in SUV sales drop

Posted by: Daniel Burns

 

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Are high gas prices killing Americans’ love affair with gas-guzzling SUVs? Looks that way.

In April, SUVs and light trucks took their smallest share of total U.S. vehicle sales in nearly nine years, and dealers sold more new cars than trucks for the second month running — the first time that’s happened since 2001. While many factors have teamed up to torpedo sales of high-ticket vehicles like SUVs — tighter credit, a tough job market, slumping real estate values and a generally soft economy — the fact that pump prices have soared to a record aren’t helping, as the chart shows.

This trend might not easily reverse in May. Gas prices are up an average of 3 percent in the first two weeks of the month, with the latest weekly average pump price setting a fresh record of $3.72 a gallon, according to the Energy Department’s Energy Information Administration.

May 14th, 2008

The magic of seasonal adjustments: You’re paying less for gas

Posted by: Daniel Burns

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Been paying more at the pump lately? Not to worry. It’s just a figment of your imagination, new government data shows.

The U.S. Department of Labor’s Bureau of Labor Statistics tells us that gasoline prices fell last month by 2 percent. This was the very same month when crude oil prices surged 11.7 percent and there was NO pass through at the pump? Hmmmm.

Meanwhile, another branch of the very same U.S. government, the Department of Energy’s Energy Information Administration, contends average retail gas prices actually shot up 9.5 percent in April from March. Whoa!

Why the discrepancy?

It’s the magic of so-called “seasonal adjustments” — a practice employed by economists and other statisticians to smoothe out volatile month-to-month changes and give a supposedly clearer picture of the underlying trend within the numbers.

A look at the non-seasonally adjusted data from the BLS is closer to reflecting reality: It shows gas prices rose 5.6 percent last month.

Better, but that still understates the increase recorded by the EIA by 41 percent. Makes you wonder where the BLS buys its gas.