Pump Prices Aren’t the Problem for Americans. Plug Prices Are.
Power costs rose twice as fast as overall inflation in June and are consuming an increasing share of disposable personal income.
Let’s fix the grid.
Photographer: Chris Delmas/AFP
President Donald Trump, like many Americans, has something of an obsession with gasoline prices. He might be better off focusing on another cost with which Americans are regularly confronted: electricity bills.
The electricity component of the Consumer Price Index was up 5.8% in June, year over year. This was the third month in a row where electricity came in above the broad inflation rate and marked an acceleration in that trend, rising to more than double the CPI’s 2.7%. Meanwhile, although Trump has a habit of citing fantasy sub-$2 gasoline prices, that inflation component just registered its 13th straight month of year-over-year declines. Looking at energy costs as a share of disposable personal income, gasoline took 1.59% compared with 1.15% for electricity in May (the latest month of available data), the narrowest spread in more than four years. Rather than pump prices, plug prices look more ominous.