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Gas Prices Vs Layoff's – Are They Related ?

  Sanjiv Gupta CPA  Published 
Gas Prices Vs Layoff's – Are They Related ?

Have you ever visited a Gas Pump and wondered how this gas price may impact jobs.   Some obvious thoughts might come to mind like the trucking industry getting slow due to high fuel price but there is a lot more look at than this.   Let's start by looking at the history of gas prices during the last year.

Now if you take a look at jobless claims, you will notice how jobless claims are directly related to gas prices.  Take a look at the chart below,  you will find some interesting trends in U.S. layoff activity from 7 January 2006 through 25 February 2012.

With average gas prices going above the $3.50 per gallon mark within the last several weeks, there is a major shift in the business outlook. You will find that gas price is the trigger point for affecting employee retention decisions at U.S. employers in 2011.  With the gas price at a record high, it is no secret that the current trend of faster improvement in U.S. layoff activity won’t last much longer.   With high gas prices, we will see more unemployment and poor business performance.

What do you think about gas prices?  How do gas prices make a difference in your life?