Energy expenditures as a percentage of PCE at All Time Low

Note: Back in early 2016, I noted that energy expenditures as a percentage of PCE had hit an all time low. Here is an update through the recently released April PCE report.

Below is a graph of expenditures on energy goods and services as a percent of total personal consumption expenditures through April 2020.

This is one of the measures that Professor Hamilton at Econbrowser looks at to evaluate any drag on GDP from energy prices.

Click on graph for larger image.

Data source: BEA.

The huge spikes in energy prices during the oil crisis of 1973 and 1979 are obvious. As is the increase in energy prices during the 2001 through 2008 period.

In April 2020, energy expenditures as a percentage of PCE was at a record low of 3.54% of PCE.  This was below the previous low of 3.66% in February 2016.

This new record happened even with a 13.6% annual rate decrease in overall PCE in April (energy expenditures declined more in April than overall PCE).