naked capitalism

Yves Smith says:

eoghan,

First, the credit card issuers have debit card products too. Second, and perhaps more important, they have relationships with service establishments, in this case, the gas stations. Third, miles driven in April 2008 fell to the lowest level since April 2003.

From the same Bloomberg story:

The report from Purchase, New York-based MasterCard was assembled by MasterCard Advisors, the company’s consulting arm, and is based on credit card swipes and cash and check payments at about 140,000 U.S. gasoline stations.

dryfly says:

So it’s a guess, then?

To really know you need some data on the overall trend, seasonality & volatility… model for all then see how far the actual outcome result is off the number one would have expected from the model and how well that difference would be explained by natural variation or an actual shift in usage patterns..

With these prices one would sure hope people are cutting back but without a longer trend showing ‘down’ – saying consumption has slowed is still just a guess. Maybe a good guess, but a guess.

Anonymous says:

I read an article recently–maybe The New York Times?–that said some gas stations will no longer accept credit cards, and others are offering cheaper cash prices, because the credit card fees are absorbing most or all of the retailers’ margins on gas sales.

Eoghan says:

I take it back! The inventories data today doesn’t leave much doubt but that consumers are using less than expected. I still retain the right to be troubled by forecasts based on past experience in these changing times!