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.”
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.