January 4, 2023

Gas Prices Have Finally Dropped — What About Inflation?

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Over the last 12 months ending in July this year, the cost of gasoline went up by 44%, and fuel oil price by 75.6%, according to reports following the release of the U.S. Bureau of Statistics Consumer Price Index for July.

Will we see inflation continuing to boost these numbers? That’s unlikely based on the current situation.

Despite hitting an all-time high in June, gas prices went down not long after, bringing financial relief to motorists and other consumers across the country. After reaching $5.10, the average national price of regular gasoline has fallen to $3.99. The price of fuel oil, as well as those of some other goods that had seen big increases, also fell sharply last July.

Does this mean that the rate of inflation is going down too? Kind of. Since gas makes up about 4.8% of the Consumer Price Index (CPI), the relatively huge declines in gas prices should be able to bring down inflation, according to Joann Weiner, an economics professor at George Washington University, in a recent Newsweek interview.

So, if costs keep trending downwards, the falling gas prices are expected to reduce the CPI. However, analysts have warned that a couple of factors remain that will keep overall prices unsteady.

Let’s take a look at the current oil crisis for instance. While prices at the pump have greatly eased, the longer-term outlook for oil indicates low inventories that will keep prices elevated.

Aside from the Russia-Ukraine war, the unwillingness of the Organization of the Petroleum Exporting Countries (OPEC) to significantly increase production is limiting the amount of additional oil entering global markets. The organization and its partners, OPEC+, announced a small output increase of 100,000 barrels a day for September, which was less than what the market had expected.

Another factor that might hinder inflation rates from dropping is housing. A big part of the basket of goods and services that the government uses to calculate inflation, its costs (including owners’ equivalent rent and rent of primary residence) make it a highly influential piece of the CPI, as calculated by the Bureau of Labor Statistics. Shelter comprises nearly a third of the overall CPI, and makes up around 40% of core CPI.

Additionally, James Devine, an economics professor at Loyola Marymount University, stated that falling gas prices won’t impact the core inflation rate despite helping lower CPI inflation, according to the same Newsweek report. Core inflation excludes food and fuel prices as they usually vary widely each month. In other words, the soaring gas prices never raised core inflation substantially, which means that the present declines won’t pull it down significantly either.

Another economics professor, David Fiorenza, who teaches at Villanova University, suggested that when paired with the anticipated interest rate increases, falling gas prices might likely help level off inflation before it starts to decrease.

Got an Old Car You No Longer Need? Here’s the Best Thing You Can Do with It

With our economy’s future still uncertain, it makes perfect sense to spend less and save more. One way you can save a great deal of money is by disposing of that old car you have that’s causing you endless headaches with its never-ending costly repairs and maintenance.

When you hand over that vehicle to us at Veteran Car Donations, you’ll not only be saying goodbye to your car woes, but you’ll also be making a difference in the lives of the struggling veterans in your local area.

We’ll have your automobile fixed before putting it up for auction. We’ll then use the proceeds to help fund the life improvement programs of our reputable, veteran-focused charity partners. These IRS-approved 501(c)(3) nonprofit organizations cater to veterans who are homeless and unable to find decent jobs as well as those suffering from disabilities and serious illnesses, including mental health disorders.

Our nonprofit partners use the funding we give them to provide deserving veterans with housing and financial assistance, employment and livelihood opportunities, family support, free quality health care and medical treatment, psychotherapy services, scholarships, and other services meant to uplift their lives.

Expect to receive valuable rewards for your donation. We’ll send you by mail the 100% tax-deductible sales receipt of your vehicle within days after it gets sold. This receipt will entitle you to receive the maximum tax deduction in the next tax season.

We’ll also haul your car away for free at a date and place of your choice. There’s no place in the United States where we can’t reach you since we operate throughout the country.

On top of the material rewards you’ll get, your vehicle donation will also give you that exquisite feeling of satisfaction, knowing that you’ll be helping uplift the lives of our nation’s suffering heroes.

We accept nearly all types of vehicles. We even take those that have dents, scratches, or defective parts. If you’re uncertain about your car’s qualification for our program, let us know your concerns here and we’ll tell you what we think.

For inquiries, feel free to give us a call anytime through our toll-free hotline at 877-594-5822. Visit our FAQs page to learn more about our quick and easy donation process and other important details.

Touch the Lives of Our Unsung Heroes Today!

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There’s no better time than now to show our hurting heroes in your area how much you care about their wellbeing. Your car donation will surely touch their hearts. Call Veteran Car Donations at 877-594-5822 or fill out our secure online donation form now! 

Last Updated: March 8th, 2023