I hate to take one commodity and declare there is inflation or deflation but overall inflation expectations help to drive inflation trends (is one specific thing the Fed claims to look at) and gasoline prices at the pump is something that we see everyday and is likely one of the most high profile price indicators the average person is exposed to. As of last night, the average gallon of gasoline according to AAA rose 2 cents breaking out to the highest level since Oct ’08 at $2.70, a 67% rise over the past year. They still remain however well below the high of $4.11 back in the summer of ’08 but the economic impact of its moves, if sustained, are worth monitoring. For every .10 move higher in gasoline prices, its almost an extra $14b annualized out of consumer pockets.
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