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Rising Gas Prices Are a Sign of a Healthy Economy

Posted on the 01 March 2013 by Mdelp

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According to the U.S. Department of Energy, the average price of regular gasoline in California rose from $3.60 at the beginning of the year to $4.21 this week.

That’s an increase of 17% in two months or as it relates to my wallet, $12 more per fill up.

Some might be upset about this but I see rising gas prices as a sign of a healthy economy. Allow me to explain.

This chart shows the year-over-year percentage change in the price of regular gasoline (blue line) as compared to the year-over-year percentage change in the S&P 500 Stock Index (red line).
FRED Graph
This chart shows the price of Regular Gasoline (blue line) as compared to Total Private Employment (red line)
FRED Graph
Along with the S&P 500 Stock Index and Private Employment, changes in gas prices have a strong correlation to changes in other aspects of the economy such as Retail Sales, Home Prices and New Car Sales. Hopefully these charts can make the pain at the pump a little more bearable.

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