A few numbers beyond the gas price spikes

Been on vacay and with the weirdness and outright stupidity inside and outside of America, it's been a lot to sort through. But wanted to quickly mention a few developments of the last week.

As the nationwide price of gas nears $4 a gallon and Wisconsin has seen its gas prices rise by $1.13 a gallon in the last month, has gas usage or supply actually slowed down in the US? And the answer so far seems to be "No." Which is a bit different than when gas was spiking up 4 years ago aftrer war broke out in Ukraine, and Americans dropped their usage.

I'll also add that we got indications in the last week that inflation was going through the pipeline of businesses even before bombs were falling on Iran and other parts of the Middle East.

PPI: The Producer Price Index for final demand increased 0.7 percent in February, seasonally adjusted. ... Core +0.5 percent Way above consensus forecast.

— Bill McBride (@calculatedrisk.bsky.social) March 18, 2026 at 8:06 AM

Goldman: "Core import prices rose 1.2% month-over-month, above expectations. ... We estimate that the core PCE price index rose 0.32% in February, corresponding to a year-over-year rate of +2.93%."

— Bill McBride (@calculatedrisk.bsky.social) March 25, 2026 at 10:15 AM

So we were set up to have a sizable increase in consumer prices for March and/or April outside of what will be a 30%+ increase in gas prices. Then combine that reality with the increase in the federal budget deficit that the war and the tax cuts are causing, and the bond market has seen yields jump over the last month.

And one last item I'll note is that the income tax cuts in the last Wisconsin state budget are also starting to show up in the state's bank account, as there was an adjusted decline in income tax receipts of more than 30% for February due to higher refunds.

If we get another month of lower income tax receipts for March, does that and the prospect of a possible inflation-induced recession start to eat into the $2.5 billion surplus, and tank any chance of income or property tax relief before the November elections?

More news to come in the coming days, for sure. But the trend doesn't look great for either fiscal stuff, or the US economy as a whole.