Why gas prices are on their way down
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Why are gas prices declining despite inflation?
Curbing inflation doesn't make things cheaper, but a few things are cheaper. Inflation is moderating. Last week we saw the consumer price index going up 2.4% in a year versus 2.7% as calculated a month earlier. So prices are still going up and we often figure nothing ever actually goes down in price. An exception is gasoline, down 7.5% in a year. Not by a lot.
What economic principles explain the drop in gasoline prices?
Twenty cents a gallon on average, but enough to buy yourself a king-sized bag of peanut M&Ms on a typical fill-up. Marketplace's Mitchell Hartman has more.
Prices are still rising on most consumer goods more than the Fed wants. By contrast, says nationwide economist Kathy Bustanczyk.
Gasoline prices have been deflating. Regular now is below $3 a gallon.
The reason is basic economics, says Gernot Wagner at Columbia Business School. Supply up, demand down, prices go down. OPEC is boosting oil production, while the U.S. plans to flood the world market with Venezuelan crude. Meanwhile, as electric vehicle adoption spreads globally, it throttles gasoline demand. all of which translates to lower gas prices for U.S. consumers. Here's Stephen Cates at Bankrate.
I think the impact is very much mental for most people. Talking to my father, he said, wow, gas prices are so low now. This is great.
But that positive sentiment might not boost overall consumer confidence or spending much, says Johnny Sawyer at polling firm Ipsos.
Even though gas prices are down year over year, their prices are up, you know, housing, groceries.
Also, electricity up 6% and natural gas up nearly 10% since last year. So while it's cheaper to drive to and from work these days, it's more expensive to heat and light your house once you get there. I'm Mitchell Hartman for Marketplace.
I saw one calculation that televisions are 99.4 percent lower in 2026 compared to the inflation adjusted price in 1950. That's not the trend for college tuition, health care services or housing or child care. Better stop there. Now, the goal can be to stick a soft landing, calm prices down without falling into a pit. David Kelly is chief global strategist at J.P. Morgan Funds. He says that he's gone through all the data and concludes things are nicely balanced out for now.
That's right. You end up in an economy that's pretty stable, about 2% growth, no recession really on the horizon. I think the inflation rate will eventually later this year come down to 2%. I think the unemployment rate, if anything, will end up lower than it is now, so maybe at 4% by the end of the year. It's not brilliant, but it's certainly not bad. I think a fairly stable, moderate economy is where we are.
What was Winston Churchill's warning about governing something about events, dear boy, events? We don't know what's going to happen tomorrow, but barring something bad, right?
I think the history of the 21st century is beware of the shock around the corner, because it's probably something you never even considered. I think we're seeing so much frenzy in AI spending and AI infrastructure, that there's some risk from that. And then there's geopolitical risk. So there's plenty of things that could go wrong. But really what I worry about for investors is not so much the economy is going to do something terrible to them.
How does increased oil supply affect gasoline prices?
It's just that something does go wrong, they could get pretty badly hurt.
We have a new approach now to the affordable housing crisis. It is a way to build more homes quicker, given the thousands of different sets of rules governing how you build, rules which vary by county and town. This is one of the companies we discovered reporting a one-hour special called Building Tomorrow. It's from Marketplace and this old house, Radio Hour. At Reframe Systems in Andover, Massachusetts, they can dial in local building codes when making houses in factories. Reframe's co-founder is Felipe Polito.
In the United States, there are over 30,000 zoning jurisdictions. Every single project has to be built custom to meet the demands for that site. You cannot build a single product repeatedly in a factory because you need to get this variation outcome.
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