With the national average price of gasoline in the U.S. officially set to fall below $3.50 per gallon during this week, we have discontinued running our "Good Morning, White House Staffer" feature at the top of our site, as we promised last week - we've attached it for reference to the end of this post.
With that improvement in the average gasoline price, we anticipate that the reported pace of layoffs in the United States will change somewhat for the better within the next two to three weeks, as employers adjust their employee retention plans during their next pay cycle. Here, the employer reaction will be driving by the combination of their lower cost of doing business and an effective increase in the discretionary disposable income of Americans, who will increasingly have more money to spend on things other than gasoline.
We have previously observed that the $3.50 per gallon mark in the national average price of gasoline, as measured in terms of 2012 U.S. dollars, seems to be the magic threshold at which new jobless benefit claim filings reported by the U.S. Department of Labor are affected by gasoline prices.
In practical terms, we should see the trend in the number of new jobless claims shift to a less negative trajectory, as gasoline prices will have fallen to a level where they will stop having a direct impact upon the rate at which Americans file for first-time unemployment insurance benefits.
We say "less negative" instead of "positive" because other factors will dominate the overall trend. Namely, the failing economies in both Europe and Asia, where the falling relative demand for oil expected in the future is the principal reason why global oil and gasoline prices are now falling. We anticipate that the economic situation in these nations will increasingly and negatively affect the U.S. economy into 2013.
In the short term however, we anticipate that the U.S. economy will see a bit of improvement from the current quarter, which we've previously described as effectively being in a microrecession.
Enjoy it while you can!