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October 16, 2006
AG Edwards notes purchasing power for gasoline at best level since 1981
Most analyst focus myopically on the retail price of gas or diesel. The other side of that is where wages are. The divisor of those two is the amount of gasoline the average hourly wage can buy. That is a much better measure of the actual impact of gas prices on workers than comparing the price of gasoline against some arbitrary basket of goods. That number hit bottom in July at 5.6 gallons of gasoline per hour of average wage (the worst it had been since 1981). Since then it has rallied significantly and currently stands at 7.2 gallons/hour. This increase, in part explains the improvement in consumer confidence. Things are on the rebound and going well. Read the complete analysis here.
Posted by Martin at October 16, 2006 12:07 PM
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