Tuesday, April 24, 2012

Jobs and Gasoline

At any given moment, closely related indicators may be moving in opposite directions. We see that this week with gasoline prices and the job market. In general, U.S. employment increases, and gasoline prices increase accordingly. With more people driving to work, less gasoline is available for everything else. This week, though, that connection is not holding. The job market is showing new signs of recovery. In particular, there are more job openings being posted, and more of them are for full-time permanent jobs. Meanwhile, gasoline prices are edging downward, down almost 4 percent from their recent peak.

These two measures cannot move in opposition for very long. My hunch is that both employment and gasoline prices will be higher 6 weeks from now than they are this week.