The job market is just beginning to pick up speed. It has been slowly improving over the past 15 months. That improvement has been accelerating since last fall. All this is good news for the American economy. But it means we’re likely to keep paying higher prices at the pump.
Even though there are two million more jobs in the U.S. today compared to a year ago, we are burning 33.5 million fewer gallons of gasoline each day. More Americans are working yet we’re consuming less gas. Is it due to more fuel-efficient cars? Hardly. The average vehicle on American roads is almost 11 years old according to auto data firm Polk.
We’ll see how resilient the improving job market is to higher pump prices on Friday with the release of the February employment report. Gas prices have risen more than 30 cents a gallon in the past month. It will be encouraging if we continue to see new jobs added at a faster clip while pump prices eat away at consumers spending power.
It is possible to see hundreds of thousands of new American jobs created each month and not see sky-high gas prices. In 1998, three million new jobs were added and gasoline was a steady $1.00 per gallon. Of course, since then U.S. drivers have seen the forces of globalization at the pump. China’s economy has more than quadrupled. India, Indonesia and Brazil are all booming, demanding more energy.
America needs more jobs. More working Americans will make us a stronger economy and more competitive. Just be prepared to pay the price.