Divide the price of gasoline by average hourly earnings of private sector production and nonsupervisory workers:
Figure 1: Number of minutes of labor per gallon of regular gasoline – all private NFP (blue), and leisure and hospitality workers (tan). NBER defined peak-to-trough recession dates shaded gray. Source: EIA and BLS via FRED, NBER, and author’s calculations.
The number of minutes needed to buy a single gallon was lower in January than in January 2020, just before the pandemic.
Since the distribution of wages is skewed, it makes sense to see how the cost of gasoline has evolved using the wages of the lower paid. This is proxied by the earnings/hour of those in the leisure and hospitality services. 9.6 minutes in January is less than the value recorded in February 2021.
It is always a pleasure to read your post.
But what about the relative price of eggs? Or the relative price of beer? One could go on and on until one finds some way of arguing that Biden is leading us down the path of SOCIALISM! Which is my way of saying Bruce Hall is waiting for his daily email from Kelly Anne Conway.
Fascinating. Thanks. On gas consumption – I wonder what impact the use of EVs and remote work is having? For the first time in a 40 year work career – I work primarily remote going into the office one-day a week. Also the corporate office park which includes some IT consulting firms where my office is located used to be full with 200-300 cars – it now has 20-30. Anecdotal evidence – but I wonder what impact change in commuting is having on gas consumption.
Talk about killer ratios:
“Per CBB Analytics, Clark has the nation’s second highest usage rate, a measure of how often a player contributes to a play scoring and assisting. But among the players who are top 10 in usage rate, she has the highest assist percentage, a measure of how many of her teammates’ field goals a player assists on while she is on the floor.”
https://www.usatoday.com/story/sports/ncaaw/bigten/2024/02/01/caitlin-clark-soccer-skills/72436601007/
Any sports fans in the Brooklyn vicinity paying any damned attention?? I’d tell you just because she doesn’t play at your alma mater ______ down south way doesn’t mean she isn’t special, but we like to keep things “on the low down” here.
She’s one, maybe two, games away from moving to #6 in all-time assists and has an outside shot of finishing as high as 3rd. She will join Sabrina Ionescu as one of the only two players with 2,000 points and 1,000 assists in two or three games. It’s very unlikely that she will join the 2,000 / 1,000 / 1,000 club (Ionescu is the only member), but she won’t fall far short.
She’s great. Can’t wait to see her in the WNBA.
Sabrina Ionescu is taking on Curry in a 3 point contest during the NBA All Star weekend. Should be a great contest.
It’s a Scotty Pippin kinda thing. Only more scoring.
Clark is such a pleasure to watch. Even if opposing coaches assigned a defender to guard her when she gets off the bus, she’d still get her 30 points and control the floor in other areas.
While on the WBB subject, keep an eye on JuJu Watkins, freshman from USC, who dropped 51 on Stanford last week. Plenty of other excellent backcourt players in the PAC 12 at multiple schools too who are often overlooked. Utah, last year, could have ended LSU’s year in a regional semi. The Utes, down 1, missed two FT with 4.7 seconds left and lost by 3.
With the focus on Clark and rightly so on South Carolina and LSU, west coasters are often overlooked.
At the risk of annoying our gracious blog hosts, as far as wandering off topic:
https://www.sports-reference.com/cbb/seasons/women/2024-leaders.html
From my viewpoint what makes Clark special is her ability to dish the ball off, as explained in the USA Today article. We can find lots of talented backcourt players who can hog the ball and score a ton of points in any game (Russell Westbrook when he was younger in the men’s game). The ability to influence your teammates’ game in a way that also raises their game really to an entirely higher level (we saw it with Magic Johnson and Larry Bird) is something incredibly special.
Thus, labor productivity with respect to gasoline is no higher than it was in the early 2000s. So, no effective productivity gain in twenty years in this respect, which is really not great.
Also, the shale revolution reduced the amount of time required to buy a gallon of gasoline by almost half.
Finally, the EIA sees US oil production declining for most of the balance of the year.
https://www.princetonpolicy.com/ppa-blog/2024/2/7/us-crude-and-condensate-supply-outlook
“Thus, labor productivity with respect to gasoline is no higher than it was in the early 2000s.”
There little Stevie goes again. Making the dumbest comments ever. Gasoline is not produced by your average American workers. And your comments are a sick joke.
Who the heck would try to connect productivity to gas prices? – and why?
Gasoline is not an input into any meaningful fraction of products and services. It is a consumer end product in itself
Menzie is showing how workers may need to use a smaller fraction of the fruits of their labor to buy a gallon of gas and go to where they want/need to go. James is raising the issue that the gallon may get them further than they used to (and some will get there without using gas). What the hell are you trying to show beyond that you can throw sand in your own eyes by blabbering about fancy numbers normalized to fancy numbers. What is the supposed insights?
“Who the heck would try to connect productivity to gas prices? ” The worst consultant of all time.
Why? Stevie is gunning for another appearance on Fox and Friends.
For the education of the worst consultant ever, the nominal price of gasoline has tripled since 1998 while the general price level has less than doubled so anyone who past preK arithmetic would know that the relative price of gasoline is more than 1.5 times what it was some 25 years ago. But anyone who would write your comment does not seem to get the gasoline market, general prices, or basic arithmetic. Par for the course for the worst consultant ever.
Stevie has invested a new metric, labor output per gallon of gasoline, and has declared the performance of that metric ‘not great’ over the past 23+ years. But why is that metric important? What does it imply? Stevie doesn’t tell us. He just wants us to know that, for some reason, it’s ‘not great”. Stevie also doesn’t give us anything to compare it to. I can remedy that. Let’s compare performance since 2000 to performance before 2000:
https://fred.stlouisfed.org/graph/?g=1fXR6
From 1980 to 2000, also flat. From 1947 to 1980, downward pretty sharply. So if down is bad (Stevie didn’t say), then performance is much better since 2000 than from 1947 to 2000. Or is down good? I’m pretty sure Stevie’s point was to say things “aren’t great”, without regard to up, down, history or much of anything.
Stevie also forgot to mention that the expected decline in oil output is from a recent record level. That record level of output is probably because of Biden’s war on fossil fuels, don’t ya think?
But of course Stevie forgot. Stevie is a “consultant” and a polemicist, not an actual analyst for the sake of getting the analysis right.
Maybe Stevie does not know that the relative price of gasoline has risen by over 50% over the past 25 years. After all Stevie only pretends to be THE expert on oil and gasoline prices.
Your blog post is an incoherent graph that is not sourced to EIA. And your statement about its forecast of US oil production is inconsistent with what S&P Global is reporting here:
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/010924-us-eia-forecasts-lower-oil-prices-in-2025-expects-production-to-outpace-demand#:~:text=The%20EIA%20pushed%20up%20its%20outlook%20for%202024,US%20output%20averaging%2013.44%20million%20b%2Fd%20that%20year.
Not that I am calling you a liar as we have all seen how incompetent you really are even in the area where you pretend to be THE expert.
You raise an interesting point, the EIA’s forecast for Q4 2024 and into 2025, that upward pointing tail. One has to wonder how the EIA gets there. Rig counts have been had been falling for most of 2023 until about October, and have largely held steady since. Within this context, the EIA sees falling oil production for most of the year, ie, the current rig and spread count is not deemed sufficient to maintain current production. What’s more, US production has been buttressed by the cannibalization of the DUC (drilled but uncompleted) well inventory.
The breakeven to add rigs in most of 2023 was around $90 WTI, and WTI today is at $77. So where does the growth in production come from? If you assume more rig additions, then I would have to ask at what price. The EIA is projecting WTI at $78 for the balance of 2024 and $75 for 2025. Well, that would not seem sufficient to stimulate rig count growth based on the recent record. I’d add there’s also typically a six month lag between a given oil price and its impact on production, so if you want that Q4 kicker, those prices have to move up in Q2.
One could argue that productivity will improve with longer laterals and higher recovery rates. I don’t have an answer to that other than we’ll have to wait and see, but if DUCs continue to be cannibalized, then I interpret the situation of the industry as unhealthy.
I had assumed that the kick-up in forecast production in Q4 was at the behest of the Biden administration via the Secretary of Energy. The EIA guys are not going to fall on their swords based upon some theoretical numbers many months away. It’s not a political fight worth fighting, so bump up the production forecast, and we’ll see how the numbers turn out. Discretion is the better part of valor, that type of thing.
But we’ll see. I personally find it hard to square 1) stable to falling rig counts, 2) a forecast oil price that is uninspiring from the operators’ perspective, 3) continued cannibalization of the DUC inventory, and 4) the EIA already calling, and reiterating in various venues, a local production peak. What turns around the trends in production in Q4? It has to be some faith in productivity gains. And maybe that happens, or maybe it doesn’t. What does happen, though, is an election in November, just when production is forecast to increase.
https://www.eia.gov/outlooks/steo/pdf/compare.pdf
Word to the wise. Never trust a damn thing Princeton Steve puts on his blog or writes in the comment section here. I have provided what the EIA has been forecasting for US oil production. Sorry but what Stevie said is not consistent with the forecasts in the above link.
Labor productivity with respect to oil consumption in 2023 was worse than it was in the 1960s, indeed, before 1979. Further, labor productivity with respect to gasoline consumption in 2023 was worse than only the oil shock years of the early 1980s and ‘peak oil’ years of 2005-2014 (mostly the China Depression). (See the graph at the link.)
Here are the historical averages:
1964-1978: 6.6 min of labor / gallon
2011-2013: 10.8
2015-2021: 6.5
2023: 7.3 min of labor / gallon of gasoline
It is apparent how critical US shale oil production was to restoring earlier labor / gasoline ratios, and further, that US shales are no longer able to deliver that level.
As we look forward, what matters is the trajectory of US oil production, rather than its absolute level. I have noted that the EIA is calling a US production peak for December 2023. The EIA has tended to revise up US production ex-post, and I think that will continue for much of the balance of the year, but within a plateauing to gradually declining oil production level, easing back 0.1-0.2 mbpd by the end of the year. That is, I anticipate higher production levels than the EIA’s current forecast over the next half year but converging with the EIA outlook at a lower absolute number around Q4.
In any event. to return to the base thesis: That’s what a depleting resource is all about. That’s the essence of the peak oil argument in economic terms. Society is racing to sustain its historical oil (and I’m guessing, electricity) consumption rates. Sixty years of overall productivity growth have not permitted us to use any more gasoline for an hour’s work than in the 1960s.
https://www.princetonpolicy.com/ppa-blog/2024/2/8/minutes-of-us-labor-to-purchase-a-gallon-of-gasoline
https://www.princetonpolicy.com/ppa-blog/2024/2/7/us-crude-and-condensate-supply-outlook
Your tall tales of the shale oil tail wagging the world oil production dog is pretty wimpy to begin with. The idea of calling a production peak a few weeks after it supposedly happened is an absurd concept. As noted in this article that call is not supported by realities on the ground. The people calling peak shale have been wrong again and again and again …..
https://www.forbes.com/sites/daneberhart/2023/08/16/why-americas-shale-boom-is-not-over/?sh=2d8f7e6b12e2
The price of oil is the main input into gasoline prices (with some delay and a wild card panic factor). The world price of oil is somewhat affected by US shale production but a correlation graph between oil/gas prices and US shale production should make any expert consultant put his attention elsewhere. This is sub-undergraduate science 001 – if you want to know whether parameter A is a major contributor to parameter B you make a correlation graph. It will either prove that you are wasting your time, or that you got some additional work to do digging through potential confounders.
Fact is that oil prices are right where we need them to be ($70-90 range). They have pretty much been there since 6 month after Biden took office – which the exception of the first 6 months after Russia’s massive expansion of their invasion of Ukraine. The reasons we need to keep oil in that range are many. The people here who want to know, can/have figured that out – the others are a waste of time.
“Labor productivity with respect to oil consumption in 2023 was worse than it was in the 1960s, indeed, before 1979. Further, labor productivity with respect to gasoline consumption in 2023 was worse than only the oil shock years of the early 1980s and ‘peak oil’ years of 2005-2014”
You are more mentally retarded than JohnH. Dude – the relative price of oil varies a lot. Labor productivity does not.
Stevie does two graphs in two posts. The first repeats Dr. Chinn’s graph with no attribution. Plagarism at its finest. The second as I already noted is an incoherent mess with no meaning.
Maybe the House Republicans should remove Mike Johnson as Speaker:
House GOP erupts in fury over “embarrassing” and “shameful” defeats
https://www.axios.com/2024/02/07/house-gop-defeats-mayorkas-impeachment-israel
House Republicans’ exasperation and angst boiled over on Tuesday as votes to impeach Homeland Security Secretary Alejandro Mayorkas and pass an Israel aid package went down in defeat.
This really could be a red flag for Republicans. They aren’t even effectual at being stupid anymore.
I hear the Speaker has joined JohnH to take counting lessons from Professors Bert and Ernie.
Looks like Johnson wants to add aid to Ukraine to the bill to get more votes. Funny; military assistance to to Israel and to Ukraine without anything on the border was a Democratic notion until Republicans made everything about immigration. And Sarah Sanders found a microphone, during the Great Governor Stampede to the Border, to tell Congress to do something about the border. But, but…her former boss is the one who scuttled the border-for-military-assistance deal! So confusing…and embarrassing.
Trying to understand the MAGA Republicans on this aid to Ukraine and Israel. It is not going to pass unless we have a tough border bill. So Biden works with the die hard close the borders types in the Senate and agree to a very conservative bill.
But wait – it will not have Trump’s ugly signature so this borders bill is a “steaming pile of crap” according to Ted Cruz (word is that is exactly how Cruz likes his breakfast). So no aid for Ukraine and Israel until we get rid of this border proposal.
I’m sorry but my head is spinning. It is sort of like watching Bruce Hall and JohnH discussing economics.
why run so emotionally attached to sending huge money so humans can keep on killing each other, and in the case of Israel slaughtering children, and torturing…..
Hey troll. While I fully support Ukraine’s right to defend its homeland from Putin’s war crimes, I have also called for Bibi to be removed from power in Israel. So to your question – eff off little pest.
‘orc’ is the more appropriate slander these days.
find Ukraine on a map of “homelands’ that existed before 1914. Or where Danzig ended up in 1946!
Does a resident in Lwow, former Polish (or Rumanian) “homeland” grabbed by Stalin, care about what goes on in Donetsk?
my tax money for Stalin’s conquests to stand forever!
Find a map where the US existed before 1776. I guess you would not mind it if Putin took over part of our nation. Look troll – no one thinks the trash you place here is worth a pile of manure. So just go away.
“Bidens New Ukraine Policy…Trying to Rearrange the Deck Chairs on the Titanic…
Kiev’s manpower situation is dire and its lack of weapons also means it is limited in what it can hope to do. But the real kicker is that Kiev’s mounting casualties, more than 1,000 per week, is biting hard in public perception that the war has gone wrong. To pull men and women into the army Kiev resorts to rough, unpopular measures, using threats and intimidation. Going to the front, untrained, is seen more and more as a certain death sentence (which it is).”
https://weapons.substack.com/p/bidens-new-ukraine-policy
The futility of this war is becoming increasingly obvious. Polls are showing a steady drop in support for aid to Ukraine. Last August CNN reported that most Americans oppose more aid to Ukraine. But like past pointless and futile wars, the administration–a band of chicken hawks if there ever was one–soldiers on, afraid to admit losing again, so soon after the Afghan debacle.
When will people become so disillusioned that they begin asking, “what was the point of all the carnage and killing, when it could all have been settled two years ago?” “How can the sabotage of peace talks, which led to the destruction of the Ukrainian economy and the killing of hundreds of thousands of Ukrainian soldiers be justified by calling it ‘defending Ukraine?”
But massive killing and carnage is exactly what happened in Korea, Vietnam, Afghanistan and Iraq…and no one in Washington was ever held accountable, or even asked “What was the real point of it all?” After all, the dominos did not fall after Vietnam was lost, Saddam never had WMDs, Afghanistan never became a haven for terrorists once the Americans were forced out. The dispute in Ukraine could have and should have been settled two years ago.
Instead of learning lessons from past losses, the US simply forgets what happened and moves on to the next fiasco…in the Middle East, yet again. But what may be different this time around is that the administration has not prepared the public for yet another war…and the public has been able to see what US weapons do to ordinary Gazans–men, women and children.
why should Ukrainians give up the fight and let putin take over land that does not belong to Russia? why should Russia be permitted to continue its murderous ways in Ukraine, and sovereign and independent nation? why does Russia continue to send its people to the meat grinder so callously for land it does not own or deserve? why Johnny why? the war and death would end immediately if Russia withdrew to its own borders. if you are for peace, then that is the only action to deliver peace Johnny. any other action means you support the continued deaths of those folks.
You have to remember that Jonny boy and Tucker Carlson are cuddling up together in the Kremlin and they really enjoy those movies of Putin’s war criminals killing Ukrainian children.
Russia is doing what Lincoln did in suppressing the rebellion, the 1914 map shows no Ukraine and west Ukraine was Rumania and rump Poland.
Why should a Rumanian stuck to Kiev by Stalin, die to force Donbas and Crimea back to west satellite?
Study how Donbas enjoys being out of Kievan pull.
Lyin’ John: Didn’t you advise blog readers not to believe reports of Russian atrocities and needless civilian deaths in. Mariupol? That we shouldn’t trust corporate or government media? Aren’t you the hand wringer who detests pointless, futile, wasteful wars? Or says he does?
Interesting today: Human Rights Watch says “Putin Should face war crimes probe over devastating assault on Mariupol” as reported on CNN.
HRW says the Russian siege involved the repeated targeting and destruction of civilian buildings and infrastructure..
It is estimated that around 8,000 died as a result of the fighting.
Yet, we haven’t heard a word from you —Mr. Anti WAR—on this, only your hope that Ukraine surrenders 20% of its territory to Putin, who will be at the forefront of those charged with needlessly murdering women and children.
You’ve been given plenty of chances to admit that all this was unnecessary . No invasion. No war. No Mariupol.
Yet, here you are. Again. Mouthing anti war. Cheering on Russia.
Other than yourself, who do think you’re fooling?
For your reading entertainment:
https://www.thedailybeast.com/kellyanne-conway-is-auditioning-to-be-trumps-veep
“the anthropomorphized adult diaper known as Donald Trump”
This line made me laugh as did the rest of the great piece! Hey it even listed the other potential candidates each as pathetic as Kelly Anne.
You forgot “trump’s syphilitic mind”. Although he doesn’t say whether trump acquired it from Steve Bannon or not.
Brilliant thing is that as Trump and GOP are trying to run on scaring the minions into invasion panic, Biden can now simply say “we have a proposal – they don’t want to do anything”. The people refusing to talk and at least do something about the problem are GOP, not democrats. But because there is not a legislative proposal that need to pass, the democrats also don’t have to deal with the reluctant democrats who understand how bad that immigration compromise was.
Your post is on Reddit.
https://www.reddit.com/r/inflation/s/Kh2F8NxSwr
The Inflation forum isn’t nearly as popular as it once was. I guess because inflation is going down! But there’s still plenty of kooks around to make it interesting!
Nice to see you in another venue!
And the Reddit readers do not have to read the BS from Princeton Stupid Steve!
About the same time I tried to start cross-posting Menzie over on Reddit I got permanently banned on Reddit. I’ll let others do the societal breakdown there. Some kind of personal failure on my part I’m guessing. I was thinking of hiring Kopits as an “external consultant” and then at the last moment thought better of it.
Have you ever checked on how many comments Kopits gets on his blog posts? It is an easy number to keep track of – ZERO.
It’s “our secret”—I had a blog “back in the day”. I even got about 3 semi-well known bloggers to comment there. ’bout felt as good about that as I did when Menzie gave me a hat tip in the post part of the blog. I think they did it mostly because they knew it would make me happy when they “threw me a bone”. It DID make me feel good though. The blog is still working I believe but I haven’t updated it in probably 3 years, and I’m not even certain I can remember the passwords now.
That’s my “humblebrag” for today—Sponsored by “Republicans Scared of Taylor Swift LLC”
Is Vegas running an over under bet on how many minutes of air time Taylor gets this Sunday evening?