Wednesday, March 14, 2012

Diesel usage diverging from overall economy

While the economy has been recovering nicely from the Great Recession there are some interesting divergences which are popping up with this recovery.  One of them which has been discussed elsewhere in the blogosphere (sorry no links) is the apparent divergence between fuel usage and economic activity.

Diesel fuel usage
The Ceridian Index reports monthly on diesel fuel used by the trucking industry.   Unlike retail sales which continues upwards the Ceridian fuel index is now declining on a year over year basis. From their most recent report you can see the decline.

One can see in the next chart the apparent divergence between retail sales and diesel usage.

The researchers at Ceridian note the divergence as well and have a possible solution  Unlike the rest of the economy which is improving on a year over year basis, the housing market remains stuck in the duldroms and is still sputtering along the bottom. (See page 6 in the above linked report)

While productivity improvements are also possible I find it unlikely the rate of improvement would be enough to create the entire divergence.  Perhaps the lack of a growing home market and improved fuel usage (or the continued virtualization of our economy) are enough to close the gap between retail sales growth and flat fuel usage.  Only time and further research will tell.  Regardless this indicator bears watching.

Fuel usage and retail sales


  1. Greg,

    gasoline use has fallen off a cliff, which i can understand somewhat, tho the numbers are astounding.....i can only guess less discretionary use and most of the people who have 'left the workforce',ie, given up looking
    are sitting home.

    diesel, primarily for semis, is very surprising.

    i can promise u its use in pleasure boats[the bigger ones] has really dropped off, but thats got to be a very small market to begin with.

  2. Yeah, it is perplexing. There's a lot of factors in the mix (which I mentioned above) but rising gas prices will put a crimp in consumer spending.