Ever since June 2014, there has been a significant decrease in the process of oil and gas which has reflected in the decline of domicile appetite costs. The falling energy prices in recent years had benefited households in the United States as it has driven down the overall cost of living. According to the latest data from the U.S Energy Information Administration, the energy costs in America have steadily declined between 2008 to 2014 by approximately 14.1%.
Despite the increase in food and shelter of the overall index, the reduction in energy prices had significantly decreased and has an impact on household expenses. There has been a decrease in chained consumer price index for urban consumers by 1.2 per cent according to figures provided by the U.S Bureau of Labor Statistics (BLS).The Brent crude oil and the Henry Hub natural gas have declined around 71 percent and 56 percent, respectively during the time between June 2014 and Feb. 2016. Any change in the Brent crude oil has a significant impact on gasoline, diesel and heating oil costs. Henry Hub price changes affect natural gas prices and electricity prices.
Within the consumer price index, the energy component is more dynamic as compared to food and beverage and shelter component which have shown an increase by 2.5 percent and 5.1 percent respectively.
The all- item C-CPI-U is a measure of the changes in the overall cost of living based on several surveys including the Consumer Expenditure Survey. The C-CPI-U formula represents different substitutions that consumers make in relation to changes in prices. An example of this if prices of gasoline rises, which leads to rising costs of car transport, this may result in people substituting private car transport with public transit or ridesharing options. This energy index includes motor fuel, electricity, natural gas, fuel oil which make up almost 8 percent of total household expenditures in the year 2014.
In 2015, the normal annual domicile appetite expenditure peaked to about $5,300. Between 2008 and 2014, the annual household energy declines by 14.1 per cent. This consisted of a decline in the household expenditure by 17.7 per cent for gasoline, 25.1 per cent for natural gas and 28.3 percent for fuel oil. On the other hand, electricity expenditures showed a decline by around 0.7%. These normal domicile expenditure appetites are used by the EIA to make estimated for summer travel expenditures and winter heating fuels expenditures.
Overall, the EIA has made an estimate that the average energy expenditure per U.S household had reached its peak level in 2008, which was around $5,300 per household, per year. The following year, being 2009 showed a steep decline. But then in 2010 and 2011 there was another increase. However, since 2011 there has been a steady decline in the annual household energy costs. The years 2012, 2013 and 2014 subsequently saw declines on a yearly basis. As mentioned earlier, the average annual energy costs per households dropped to 14.1 percent between 2008 and 2014.
Cheaper fuel has lowered the cost of living and helped in boosting general consumer spending leading to a boost in the economy. The per gallon cost of regular gasoline has fallen to a six-year low of approximately $2.01. On the other hand, there has been an inflation in the prices for shelter, which includes rent and hotel rates which are propping up the inflation besides the fact that oil prices are plunging. According to fed officials, the inflation is expected to reach their target as they hope that the falling oil costs diminish. This, however, may take longer than expected as energy prices continue to fall.
As energy costs continue to fall this benefits the consumer with cheaper home heating / cooling costs. Not only are consumers becoming more cost conscious on oil and gas costs they are also becoming more savvy on other areas within the home where savings can be made. One of these savings is home insulation. Many homes in the US have a serious lack of insulation and by bring old homes up to new code standards thus further huge savings can be made on your home heating and cooling costs.
Using products such like Owens Corning, Roxul insulation, Johns Manville, Knauf, Rmax and Hunter will future proof your home for not only energy cost savings but by also making it more salable for when that time comes. A better insulated home has a 35% more likelihood of selling over a similar priced house with very little insulation.
Read our other blogs which will provide you with hints and tips on where you need to insulate your home such like the crawlspace insulation, attic insulation, floor insulation, wall insulation and many other places that can save you on your home energy costs.