Oregon’s Energy Intensity and Household Spending

Energy costs can have big impacts on the economy. This has certainly been the case historically with the 1973 oil crisis and U.S. recession being a prime example. More recently we can observe the impact of gas prices on American automobile purchases. When gas is near $4 per gallon, we buy more cars, but when gas is $2 or $3 per gallon, we buy more trucks and SUVs. Furthermore, we know energy spending is a larger share of low and moderate income household budgets. When prices are higher, households have less money to spend on all other goods and services (or to save) given they need to put gas in the tank to get the kids to school, drive to work, and the like. As such, whenever there are big swings in energy costs, the question is what impact will that have on the U.S. economy, and then how will that impact the Oregon economy as well.

Source: Oregon’s Energy Intensity and Household Spending | Oregon Office of Economic Analysis