American gasoline sales up in 2015, reversing long-term trend

Sales of pickup trucks, SUVs and vans outpaced passenger cars 28%, contributing to increased gasoline use

Gasoline consumption is on the rise again thanks to lower prices, higher wages, and greater sales of gas guzzling vehicles, according to the US Energy Information Administration.

U.S. motor gasoline product supplied, a proxy for gasoline use, has been rising in the past year after reaching an 11-year low in 2012. More than 90 per cent of U.S. motor gasoline is used in light-duty vehicles (LDVs)

gasoline
Source: U.S. Department of Labor, Bureau of Labor Statistics; Federal Reserve Bank of Atlanta.

The U.S. Department of Labor’s Bureau of Labor Statistics publishes the Job Openings and Labor Turnover Survey, which provides data on labor availability, such as the number of people hired and the number of jobs left unfilled (job openings) each month.

Since the start of 2014, the gap between the number of hires and the number of job openings has declined. Starting in February 2015, the number of job openings has consistently exceeded the number of hires, reaching nearly 800,000 in July, signaling a tighter labor market where competition has increased to find qualified candidates.

gasoline
Source: U.S. Department of Commerce, Bureau of Economic Analysis
Note: Data for 2015 reflect seasonally adjusted monthly values through August.

Wages appear to be rising in response to the tighter labor market. Data from the Federal Reserve Bank of Atlanta for year-over-year median wage growth show that, in the fall of 2014, median wages began to grow at a faster rate than they had been in the four years since the end of the recession.

In April and May 2015, median wages grew 3.3 per cent, the highest rate since May 2009, before ticking down to 3.2 per cent in June and July 2015.

Some of the increase in gasoline consumption may reflect more driving by U.S. consumers as employment levels and purchasing power improve.

Changes in the fuel economy of the U.S. LDV fleet can also affect gasoline consumption, particularly over a longer horizon.

Vehicle sales data from the U.S. Department of Commerce’s Bureau of Economic Analysis show that from January through August of 2015, sales of light-duty trucks—pickup trucks, sport utility vehicles, and vans—outpaced those of passenger cars by a seasonally adjusted 28%, the highest difference on record.

Light-duty truck sales, on an absolute basis, have been increasing steadily since 2009 and, from January to August 2015, averaged a record 9.57 million at a seasonally adjusted annual rate.

Even though fuel efficiency for light-duty trucks and passenger cars has increased because of fuel economy regulations, light-duty trucks have lower fuel efficiency on average than passenger cars. Over a longer period, the differences in fuel economy can increase gasoline consumption as trucks make up a higher percentage of the nation’s LDV fleet.