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Pic-of-the-Week: Weak Gasoline Sales Aid Consumers (10/20/2014)

Weak Gasoline Sales Weighing on Retail Activity but Aiding Consumers. Retail sales at gasoline stations have remained stuck in a holding pattern since early 2011 at about $45 billion per month. Strong domestic crude production coupled with only a modest rebound in vehicle miles driven continue to put steady downward pressure on gasoline prices, and, subsequently, total purchases. Measured as a share of all retail sales, gasoline station sales have declined steadily from just below 12% in early 2011 to only about a 10% share currently.

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This presents a tough market for gasoline retailers but acts as a tailwind for the consumer and the broader domestic economy. Under typical historical growth trends, gasoline retailers would be enjoying (and consumers paying) an additional $5-10 billion per month in revenue.

This is a key factor that should aid consumer spending and provide further support to the expansion going into 2015.

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mcsnead

Mark C. Snead is President and Economist at RegionTrack.

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