The recent rise in oil prices and subsequent increase to near $4 per gallon for regular unleaded gasoline is likely to negatively impact consumer confidence and retail sales. The below chart shows the negative influence increasing gasoline prices (inverted on chart) has on consumer confidence.
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| From The Blog of HORAN Capital Advisors |
The negative impact on confidence also negatively impacts retail sales when gasoline reaches $4 per gallon. Note, gasoline prices lead retail sales by one month in the below chart.
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| From The Blog of HORAN Capital Advisors |
Lastly, as noted in an earlier post, declining confidence often translates into weaker equity prices.
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| From The Blog of HORAN Capital Advisors |
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