Chart 1 below shows and interesting comparison of fuel costs v.s. disposable income from Northern Trust. The shaded areas are recessionary periods.

“The [’gasoline and other motor fuel’] component of consumption expenditures as a percent of disposable personal income…has hovered between 3.3% and 3.8% in the past year…with the April reading at 3.6%. Looking across historical data from 1959, this is the highest percentage of personal income devoted to gasoline and other motor fuel since the early 1980s.

On average, about 2.3% of disposable income was spent on gasoline and other motor fuel during 1985-2000. The nearly 52% jump in the share of gasoline in household budget in recent months is taking a toll on non-gasoline consumer expenditures."

Chart #2 is rather obvious to some of us...

Regards - VHF

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Chart #1: Fuel Costs v.s. Disposable Income

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Chart #2: Page 3 of FED Handbook