Fleet Maintenance - 40

E CO N O M I C O U T L O O K
		┬╗The price of gasoline is one of the
best coincident indicators of the level
and trend of economic activity.
138746201 | Koonsiri Boonnak | Dreamstime

"Over the next
several months,
we can expect to
see the headline
inflation rate rise,
in part because
of what we have
already seen with
gasoline prices."

Signs of
economic recovery
Fuel price fluctuations can be a good indicator
of the condition of the economy.
Among the most frequently asked questions
related to the economy is, "Where can I look for
news about how the recovery from the pandemic is going?" The answer, which might surprise
you, is right out the windshield of your car as
you pass a gasoline station. Why? Because the
price of gasoline is one of the best coincident
indicators of the level and trend of economic
activity. If you take the price per gallon you
paid the last time you filled up your tank, and
the last price per gallon you saw on your way

By Robert Dieli

ECONOMIST, MACKAY & COMPANY, AND PRESIDENT,
RDLB, INC.
MacKay & Company specializes in market research for
commercial trucking, construction equipment, and
agriculture machinery. The company provides strategic
research and analyses to vehicle and component manufacturers, distribution and service channels, industry
associations, and private equity firms. With a long career
managing portfolios and coordinating domestic economic
forecasting programs, Dieli began RDLB, Inc. in 2001. In
this role, Dieli serves as an advisor to many firms in truck,
consulting, and financial services sector. He is also an
economist with MacKay & Company.

40 Fleet Maintenance | October 2020

to work today and compare the two, you will
have a pretty good start on figuring out what
has been going on.
If you look at a chart of the price of gasoline and a chart of the volume of gasoline
consumed, you will see they look quite similar.
Except in the periods associated with crude oil
supply problems, the pump price of gasoline
moves in the same direction as consumption.
That's why the average pump price the week
of March 2 (just as the pandemic was getting
underway) of $2.514 per gallon fell to $1.870
per gallon by the week of April 27 when just
about all of the country was on lockdown.
We all drove less between March and May,
so we used less gasoline - a lot less gasoline.
Consumption was running at 9.5 million
barrels per day in March. As some of us went
back to work between May and September,
we drove more, so gasoline consumption rose
from 5.5 million barrels in May to just under
9 million barrels per day in September. Prices
mirrored that pattern. We are currently still
using less gasoline today than we were a year
ago, so the price is less.

Robert Dieli

As we write this in early September, the
average price of gasoline was $2.302 per gallon.
That is more than 12 percent below the $2.638
per gallon of September 2019.
Over the next several months, the relationship between price and usage should continue
to hold. We say "should" because one of the
quickest ways to have your head handed to
you as a forecaster is to use the word "will"
when you are talking about the crude oil and
refined products markets.
Along with what gasoline prices tell us about
the level and trend of current economic activity, they also have some important information
about the headline rate of inflation you will
read about in the next several reports of the
Consumer Price Index.
As of July, the headline rate of inflation,
which is the year-over-year percent change
in the All-items Consumer Price Index, was
1 percent. However, if you remove the energy
components of the index, of which gasoline
prices are the largest part, the rate of inflation
increases to 1.9 percent. That difference is
accounted for by the fact that gasoline prices in
July were 20.3 percent below where they were
a year earlier. Over the next several months,
we can expect to see the headline inflation rate
rise, in part because of what we have already
seen with gasoline prices.
While none of us likes to pay more for gasoline, you might want to keep in mind that
the current increase in price is actually good
news, because it is a sign of increased usage.
This means we are working our way back to the
conditions of early March, and I, for one, have
no problem with paying another 20 cents per
gallon to help get us there.



Fleet Maintenance

Table of Contents for the Digital Edition of Fleet Maintenance

Uptime: How Fleets Can Connect with Tech Schools
Editor's Note: The Aftertreatment Blues
Keys to Maximizing Trailer ROI
Best Practices for Maintaining Hydraulic Braking Systems
Solving the Parts Puzzle
Contending with Accelerated BEV Tire Wear
Cold Weather HVAC Considerations
Management: CMMS Marketplace
Economic Outlook: Signs of Economic Recovery
Diagnostics: Choosing the Right Diagnostic Tool for Roadside Triage
Fleet Parts & Components
Tools & Equipment
Classifieds
Guest Editorial: The Propane-Powered Alternative
Fleet Maintenance - 1
Fleet Maintenance - 2
Fleet Maintenance - 3
Fleet Maintenance - 4
Fleet Maintenance - 5
Fleet Maintenance - 6
Fleet Maintenance - 7
Fleet Maintenance - Uptime: How Fleets Can Connect with Tech Schools
Fleet Maintenance - 9
Fleet Maintenance - Editor's Note: The Aftertreatment Blues
Fleet Maintenance - 11
Fleet Maintenance - Keys to Maximizing Trailer ROI
Fleet Maintenance - 13
Fleet Maintenance - 14
Fleet Maintenance - 15
Fleet Maintenance - 16
Fleet Maintenance - 17
Fleet Maintenance - 18
Fleet Maintenance - 19
Fleet Maintenance - Best Practices for Maintaining Hydraulic Braking Systems
Fleet Maintenance - 21
Fleet Maintenance - 22
Fleet Maintenance - 23
Fleet Maintenance - 24
Fleet Maintenance - 25
Fleet Maintenance - Solving the Parts Puzzle
Fleet Maintenance - 27
Fleet Maintenance - 28
Fleet Maintenance - 29
Fleet Maintenance - 30
Fleet Maintenance - 31
Fleet Maintenance - Contending with Accelerated BEV Tire Wear
Fleet Maintenance - 33
Fleet Maintenance - Cold Weather HVAC Considerations
Fleet Maintenance - 35
Fleet Maintenance - Management: CMMS Marketplace
Fleet Maintenance - 37
Fleet Maintenance - 38
Fleet Maintenance - 39
Fleet Maintenance - Economic Outlook: Signs of Economic Recovery
Fleet Maintenance - 41
Fleet Maintenance - Diagnostics: Choosing the Right Diagnostic Tool for Roadside Triage
Fleet Maintenance - 43
Fleet Maintenance - 44
Fleet Maintenance - 45
Fleet Maintenance - Fleet Parts & Components
Fleet Maintenance - 47
Fleet Maintenance - 48
Fleet Maintenance - 49
Fleet Maintenance - 50
Fleet Maintenance - Tools & Equipment
Fleet Maintenance - Classifieds
Fleet Maintenance - 53
Fleet Maintenance - Guest Editorial: The Propane-Powered Alternative
Fleet Maintenance - 55
Fleet Maintenance - 56
Fleet Maintenance - A1
Fleet Maintenance - A2
Fleet Maintenance - A3
Fleet Maintenance - A4
https://www.nxtbook.com/endeavor/fleetmaintenance/may2022
https://www.nxtbook.com/endeavor/fleetmaintenance/april2022
https://www.nxtbook.com/endeavor/fleetmaintenance/toolsandshopequipment_april2022
https://www.nxtbook.com/endeavor/fleetmaintenance/march2022
https://www.nxtbook.com/endeavor/fleetmaintenance/february2022
https://www.nxtbook.com/endeavor/fleetmaintenance/december2021
https://www.nxtbook.com/endeavor/fleetmaintenance/october2021
https://www.nxtbook.com/endeavor/fleetmaintenance/september2021
https://www.nxtbook.com/endeavor/fleetmaintenance/august2021
https://www.nxtbook.com/endeavor/fleetmaintenance/july_2021
https://www.nxtbook.com/endeavor/fleetmaintenance/june2021
https://www.nxtbook.com/endeavor/fleetmaintenance/may2021
https://www.nxtbook.com/endeavor/fleetmaintenance/toolsandequipmentsupplement-april2021
https://www.nxtbook.com/endeavor/fleetmaintenance/april2021
https://www.nxtbook.com/endeavor/fleetmaintenance/march2021
https://www.nxtbook.com/endeavor/fleetmaintenance/february2021
https://www.nxtbook.com/endeavor/fleetmaintenance/December2020
https://www.nxtbook.com/endeavor/fleetmaintenance/october2020
https://www.nxtbook.com/endeavor/fleetmaintenance/september2020
https://www.nxtbook.com/endeavor/fleetmaintenance/august2020
https://www.nxtbook.com/endeavor/fleetmaintenance/july2020
https://www.nxtbook.com/endeavor/fleetmaintenance/June_2020
https://www.nxtbook.com/endeavor/fleetmaintenance/may2020
https://www.nxtbook.com/endeavor/fleetmaintenance/toolsandshopequipmentsupplement
https://www.nxtbook.com/endeavor/fleetmaintenance/april2020
https://www.nxtbook.com/endeavor/fleetmaintenance/march2020
https://www.nxtbook.com/endeavor/fleetmaintenance/february2020
https://www.nxtbook.com/endeavor/fleetmaintenance/december2019
https://www.nxtbook.com/endeavor/fleetmaintenance/october2019
https://www.nxtbook.com/endeavor/fleetmaintenance/september2019
https://www.nxtbook.com/endeavor/fleetmaintenance/august2019
https://www.nxtbook.com/endeavor/fleetmaintenance/vehicleliftguide2019
https://www.nxtbook.com/endeavor/fleetmaintenance/july2019
https://www.nxtbook.com/endeavor/fleetmaintenance/june2019
https://www.nxtbook.com/endeavor/fleetmaintenance/may2019
https://www.nxtbook.com/endeavor/fleetmaintenance/april2019
https://www.nxtbook.com/endeavor/fleetmaintenance/industryinnovations-March2019
https://www.nxtbook.com/endeavor/fleetmaintenance/toolsandshopequipment
https://www.nxtbook.com/endeavor/fleetmaintenance/march2019
https://www.nxtbook.com/endeavor/fleetmaintenance/januaryfebruary2019
https://www.nxtbookmedia.com