Gasoline topped $4.50 for the first time since July of 2022. Lowest income groups hardest hit.
A K‑Shaped Pattern at the Pump
A New York Fed survey shows lowest income groups are getting hit the hardest. It’s A K‑Shaped Pattern at the Pump
In March, high-income households increased nominal spending the most and kept real consumption essentially unchanged, while low-income households decreased real consumption of gasoline but still saw sharply increased nominal spending because of the rise in gas prices.
Higher-income households have reduced real gas consumption only modestly and increased gasoline spending considerably compared with 2023. In contrast, lower-income households increased spending by much less and decreased real consumption by much more, potentially by carpooling or substituting to public transit where available. [Mish: Or simply driving less, fewer trips and distances on vacation].
Airlines Cancelling Flights
The Independent reports All the airlines cancelling flights and adding extra charges amid jet fuel crisis
Around 13,000 flights were cancelled globally in May, resulting in two million fewer available seats, according to aviation analyst Cirium.
Alaska Air
The U.S. airline said it would increase fees for the first checked bag by $5 and by $10 for the second on its North American flights, as well as for its Hawaiian Airlines unit. It hiked prices for a third checked bag from $50 to $200.The carrier withdrew its full-year profit forecast as the sharp rise in jet fuel prices put pressure on margins.
American Airlines
The U.S. carrier said it would hike checked baggage fees by $10 each for the first and second checked bags and by $150 for the third checked bag on domestic and short-haul international flights. It also trimmed certain benefits for economy passengers.Delta Air Lines
Delta said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 on first and second checked bags and a $50 increase on the third.The U.S. airline pulled all planned capacity growth for the current quarter and forecast profit below Wall Street expectations. Delta CEO said it would hold off on updating the full-year outlook given uncertainty over how long the fuel price spike would last.
Spirit Airlines
Spirit Airlines ceased operations on Saturday after efforts to save the struggling budget carrier fell apart.While customers with flights booked can expect refunds, Spirit is not providing any help in booking alternative travel plans. Several of Spirit’s competitors have offered capped ticket prices “specifically for Spirit customers who now need to rebook cancelled flights,” Transportation Secretary Sean Duffy said.
Southwest Airlines
The American carrier forecast second-quarter profit below estimates as margins were dented by high fuel prices. It previously said it would hike checked baggage fees by $10 for the first and second bags, raising costs to $45 for the first bag and $55 for the second.United Airlines
The U.S. airline’s CEO Scott Kirby said ticket prices may need to rise by as much as 15 to 20 per cent to offset a surge in jet fuel costs. The company already instated five fare increases late in the first quarter, along with higher baggage fees, which it said have started to offset rising fuel costs.The carrier also forecast second-quarter and full-year profits below Wall Street estimates and said it expected to recover only 40-50% of the increase in fuel prices through fares and other revenue measures in the second quarter, `improving to 70-80% in the third and to as much as 85-100% by the fourth.
The U.S. airline previously said it would cut unprofitable flights over the next two quarters as it prepares for oil prices to remain above $100 until the end of 2027, CEO Scott Kirby said.
It is also increasing first and second checked bag fees by $10 for customers travelling in the U.S., Mexico and Canada and Latin America, it said in an e-mailed statement to Reuters.
The article mentioned about 40 airlines. I put a spotlight in the main US airlines.
Diesel Price Spike Raises Stakes for Trump
Politico reports Diesel Price Spike Raises Stakes for Trump GOP Ahead of Midterms.
Most Americans are focused on the cost of gasoline at the station up the street — but diesel fuel costs are also poised to set an all-time high in the U.S., which in turn is expected to drive up prices for everything from groceries to postage.
A spike in diesel fuel affects a wide array of commodities that need to move across the country – including for home building, manufacturing and much more.
Voters may not know why the cost of goods that travel via freight are going up, but they’ll blame the party in charge, said Chuck Coughlin, a veteran Republican strategist and president of political consulting firm HighGround.
“The price of everything has gone up, Trump promised just the opposite,” Coughlin said. “He’s gonna pay a price at the polls.”
“Oil is at $102, that’s a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged,” Trump said.
On Monday, Treasury Secretary Scott Bessent told Fox News that fuel price spikes, which he called a “short-term blip,” are a “temporary aberration” that would be over in weeks or months.
“President Trump has always been clear that these are short-term, temporary disruptions,” she said. “The President brought oil and gas prices down to multi-year lows at record speed, and as traffic in the Strait of Hormuz normalizes, these energy prices will plummet once again.”
Beyond the impacts to the cost of everything from eggs to sneakers, the inflationary impact of high diesel fuel lasts much longer in the economy than gasoline prices, said John Auers, analyst at consulting firm RBN Energy. Trucking, rail and freight companies sign long-term supply contracts for their diesel, meaning that a higher price will be baked into their costs – and passed along to consumers — for months at a time.
“It goes into literally everything,” Auers said about where voters will experience higher diesel prices. “Most consumers aren’t buying diesel, but it definitely gets passed through.”
Diesel consumption is “what drives the US economy,” said Patrick De Haan, GasBuddy’s head of petroleum analysis.
High diesel fuel prices will start trickling down to the every day consumer in the coming weeks, he said. That is when it could start raising the costs on clothing, appliances, home prices and more for consumers who have already shouldered price increases tied Trump’s to tariffs.
And every day that the Strait of Hormuz – which handled about 20 percent of global oil volumes before the war started – remains closed, the worse the price consequences will be and the longer the recovery will take, he said. It could take longer than a year to get oil inventories back up globally.
“Even if there’s a quick reversal, this is not something that just goes away overnight,” he said. “It’s going to get worse before it gets better and it’s going to take a long time for it to get better at this point.”
At 900 truck stops across the country, prices are already at or above the record average high of $5.82, according to Dean Croke, principal analyst at DAT Freight & Analytics. Many smaller owner-operator truckers are parking their trucks because they can’t make any money with diesel prices at their current levels, he said.
About 20 percent of operators have parked their trucks amid higher fuel costs that can add up to $1,200 a week in added expenses, according to a recent survey by DAT Freight & Analytics. Half of owners are driving fewer miles and are being more strategic about what they are hauling, preferring lighter loads that require less diesel, the survey found.
“The longer it goes on, the more likely it is that we’ll see transportation become a much bigger deal than it is already,” Croke said.
Trump Always Been Clear
Yes. I have been taking notes on clearness.
The war was supposed to be over in 3-5 days, a couple weeks, and no longer than three weeks.
The war has been proclaimed won at least 8 times. We have had 3 or 4 proclamations that the strait is open, and we have had at least three announcements that Iran agreed to a deal only to be denied by Iran within hours.
So yes, Trump has always been clearly lying. And he is desperate for a deal. Iran isn’t.
Trump Threatens to Resume Epic Fury, Axios Reports a Framework for a Deal
Earlier today, I noted Trump Threatens to Resume Epic Fury, Axios Reports a Framework for a Deal
Even Bigger Than Before
Truth Social: Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran. If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before. Thank you for your attention to this matter! President DONALD J. TRUMP
May 06, 2026, 5:41 AM
Exactly what has Iran agreed to? But here are the rumors.
U.S. and Iran closing in on one-page memo to end war, officials say
Framework for Negotiation
There is no deal. But assume for a second there is a framework for negotiation.
The negotiation will take months, not weeks.
Q: And what will the US have accomplished?
A: The US will accept the deal that was on the table before Trump started this idiotic war. That deal will be no better than what Obama negotiated in 2015.
Trump Cancels “Operation Freedom” But We Have a new Goal
Yesterday, I commented Trump Cancels “Operation Freedom” But We Have a new Goal
It took all of one day for Operation Freedom to fail.
Rubio: “The facts clearly bear out, the United States of America holds all the cards. … Our preference is for the Strait to be open, to the way it’s supposed to be, back to the way it was. … That’s what we have to get back to, and that’s the goal here.”
The new goal is to return to the status quo of things before Trump started this stupid war,
Infrastructure damage is massive and there would only be a gradual release of oil through the strait, assuming there is a deal and it holds.
Gasoline prices will remain elevated, so will fertilizer and aluminum prices.
Trump will have effectively lost the war. It will show up at the midterm elections.
Why Trump Cancelled Project Freedom
This just in
Without access to Saudi and Kuwaiti airspace, the U.S. military could not provide the necessary defensive umbrella for ships, making the pause unavoidable.
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