This isn’t the kind of news we like to receive at the stately Mead manor in glamorous Queens: US gasoline consumption, in the words of blogger Charles Hugh Smith, has “fallen off a cliff.”
This is bad news: as Smith points out, deliveries of gasoline to retail outlets track very closely with recessions going back thirty years.
Here at Via Meadia we’re confused. Financial markets are celebrating labor market data, consumer sentiment numbers and other indicators that point to an accelerating and deepening economic recovery. But central banks are acting as if the global economy still needed intensive care, President Obama’s new budget is brimming with Keynesian stimulus, and organizations like the World Bank and the IMF are forecasting slowing growth in America and a recession in Europe.
We are perfectly happy in principle with the idea that those IMF and World Bank forecasts are garbage; economists, for all their dogmatism and self-righteous certainty, are not very good at predicting the future. And we would rather bask in good news about unemployment, however qualified by reflections on a shrinking labor force, than shiver and moan about looming dangers ahead. Our animal spirits are sick of recession and our optimistic inner self thinks a recovery is long overdue.
But those gasoline numbers give us pause. When Americans stop filling their tanks, something is wrong.