by Calculated Risk on 8/29/2021 10:17:00 AM

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 July PCE report.

Below is a graph of expenditures on energy goods and services as a percent of total personal consumption expenditures through July 2021.

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 general, energy expenditures as a percent of PCE have been trending down for years.

At the beginning of the pandemic, energy expenditures as a percentage of PCE, fell to a record low of 3.3% in May 2020.

In July 2021, energy expenditures as a percentage of PCE had rebounded and were at 4.0% of PCE.  This is slightly above the pre-pandemic level in early 2020.