Gas prices aren’t leading to less driving — yet


Rising fuel prices in the United States are not yet causing a major setback in driving, but that could soon change, according to new analysis from the Dallas Fed.

The big picture: Gas demand is historically insensitive to prices.

  • But “prices may be closer to consumers’ pain thresholds than inflation-adjusted prices suggest,” writes Dallas Fed economist Garrett Golding.
  • If they increase, “expect consumers to respond by reducing their fuel consumption and overall spending sooner rather than later.”
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What we are looking at: Remote work options could reduce demand, according to the report, but it is “too early to fully assess the impact”.

  • And many low-wage workers — those hardest hit by high costs — don’t have that choice.


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