Millennials, gas prices, car sales complicated brew

Thursday, March 10, 2016

As is often the case, we've got good news and bad news.

First the bad news: the price of gasoline is going up. Now the good news: the price of gasoline is going up.

Ethanol-blend is pushing $2 a gallon again, thanks to the rebounding price of crude oil, up $5 a barrel since January, combed with seasonal refinery maintenance and switchover to summer blend fuels.

With vacation time approaching, you can be sure prices are not going to decline any time soon.

AAA expects prices to climb 30 to 50 cents a gallon by Memorial Day.

Fuel prices will cut into vacation budgets, not to mention making those daily commutes more expensive.

But, better crude oil prices should give oilfield employment and related businesses a welcome boost in Southwest Nebraska.

That $2 gasoline is still more than a dollar and a half lower than it was in March 2014.

The price of gasoline worries the auto industry, which tries to adjust its product lines to meet the demands of the market.

That market is now primarily millennials, who until recently were not buying cars or even getting driver's licenses. Millennials are defined as those between 21 and 38 in 2015.

A University of Michigan study showed that 87 percent of 19-year-olds had drivers licenses in 1983, but by 2010, only 69 percent of them did.

While many said they were too busy to get licenses and were content to hitch rides with others, many delayed because of graduated licensing laws which force teens to practice driving before getting full privileges.

Plus, the Great Recession hit about the time many millennials were graduating from college or getting their first job.

But according to J.D. Power, millennials bought four million cars and trucks in the U.S. last year, second only to baby boomers.

Low interest prices, those low gas prices and improving unemployment rates, 8 percent, have put more millennials into the market for new cars.

The interaction of demographics, car sales and gasoline prices shows just how complicated economic conditions can be.

As we listen to the political rhetoric connected to this year's presidental campaign, it's a good reminder of how little effect political promises often have on final reality.

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