From: "Richard Hong" 

>> Transportation also represents a tiny portion of the economy.

Bill,

Define tiny.  2%?  *Doubling* 2% of the economy is a HUGE impact on
inflation.  If you double a 2% piece of a basket of goods, that itself is a
2% add-on to the inflation rate.  So if inflation would have been, say,
1.5% with fuel excluded, it becomes 3.5%.  That's huge.

Do some simple math.  The average family was probably spending maybe 1% of
their income on gasoline alone.  (If they spend a mere $10 a week, that's
1% of a $52K
income).  Double that gasoline spending, and you tack on 1% - in gasoline
alone - to the perceived inflation rate in a family's life.  You don't
think that a family feels the difference between, say, an inflation rate of
2% and an inflation rate of 3%?

And $10/week on gasoline is pretty conservative.  If it's $20/week, that's
1% of a even a $100,000 annual income.  Double that, and people feel it.

Rich

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