Weekly Economic Update 03-13-26: Small Business Optimism; Existing Home Sales; Building Permits & Housing Starts; Personal Income & Spending; Consumer Price Index; and PCE Inflation

Inflation was fairly moderate in February...but just wait until next month!

The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the views of the Georgia Institute of Technology or the Georgia Board of Regents.

This past Monday morning, oil opened well above $100 per barrel as the Iranian conflict grew more uncertain over the weekend, several Gulf states slowed or stopped production, and ships were unable to safely navigate through the Straight of Hormuz.

As you can see in the graph below, historically, when oil is at $100 per barrel, regular gas is roughly $4 per gallon. The price of diesel also rises, which is a factor in the price of just about everything (more on that below in the CPI section).

While the price settled down slightly throughout the week, there was still discussion about releasing some oil from the Strategic Petroleum Reserve (SPR) to help alleviate the price shock at the pump.

If you have been reading this blog for very long at all, you know that one of the things that annoys me most is political hypocrisy, or more specifically, letting your politics drive your beliefs rather than your beliefs driving your politics. The past two weeks have given us a plethora of examples, but I want to focus specifically on the issue of releasing oil from the SPR.

During the week, I often have business news running in the background, especially between 8:00 am and 9:00 am, as that is when a lot of economic data is released. Bloomberg, CNBC, and Fox Business are all in the rotation. Earlier this week, I was listening to Mornings with Maria on Fox Business. I was shocked to hear her openly call for the administration to release oil from the SPR to alleviate gas prices for two reasons. First, as I pointed out when the previous administration did the exact same thing, it is a bad idea. The previous administration depleted nearly half of the SPR to help offset the rising price of gas, and the current administration has been slow to refill it, despite the fact that the price of oil was in the $60’s for most of 2025.

Helping offset the effects of inflation at the pump really isn’t the purpose of the SPR, and it wasn’t a good idea when the Biden Administration did it, and it isn’t a good idea now.