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have to do considerable belt tightening and Figure 3: Household Budget Shares, 1980 - <br /> <br /> perhaps forego temporarily spending on 2015 <br /> activities and items that are not essential. <br /> 5.0% - <br /> Figure 3 provides an idea of how higher gas 4.5% - <br /> <br /> prices and energy prices in general have been <br /> impacting households recently, and what the 4.0% - <br /> implication is for overall consumer spending 3.5% - <br /> which comprises roughly two-thirds of all s.o% - <br /> spending on final goods and services. By the <br /> early 1980s, the share of personal disposable 2 5% - <br /> income directed to gas purchases rose 2.0% - <br /> substantially 4.5 percent as an outgrowth of <br /> <br /> the oll embargo and Middle East conflicts 1980 1985 1990 1995 2000 2005 2010 2015 <br /> (dark blue line in the figure). Other energy -Gas & Oil All Other Energy <br /> spending (light blue line) followed suit, but <br /> not quite as dramatically. From the mid-1980s <br /> <br /> to 2003, the expenditure share of gas has With the extreme and partly unforeseen <br /> declined precipitously to levels even lower volatility in the markets for petroleum <br /> <br /> than the period leading up to the oil crisis products, along with a j ob creation slowdown <br /> starting in the fall of 1973. Thus, households in Oregon during much of 2008, our <br /> were, at least for the first several years of the forecasting model for motor fuels usage has <br /> recent run-up in gas prices, able to absorb the started to systematically miss consumption <br /> <br /> price increases without having to reduce rates on the up side. Relative errors are about <br /> usage significantly. Another element that 5 % off target; some 3 to 4 times our <br /> underlies the downward trend in budget customary level of forecast accuracy. Turning <br /> shares is the economy's increase in energy points are notoriously difficult to predict <br /> efficiency, which has significantly lowered precisely, and we definitely appear to be at <br /> <br /> the overall energy intensity of both business such a juncture. Moreover, factors such as <br /> and household activities alike. HB210 implementation (discussed in more <br /> detail below) make the fuels forecast more <br /> Going forward, the macroeconomic outlook is than challenging in this very difficult <br /> somewhat more sanguine about the hit that economic environment. <br /> household budgets are likely to take: Price <br /> <br /> pressure from transportation fuels on Figure 4 presents the outlook through CY15 <br /> household spending shares are likely to for motor fuels sales, along with historical <br /> diminish toward the levels experienced in the consumption back to CY90. For calendar year <br /> 1985 to 2003 period. This should bode well 2008 we are forecasting an overall drop off of <br /> for household spending to resume to healthier 2.3 percent, reflected in the figure with the <br /> normal rates and for the economy at large. conspicuous dip into negative territory. This <br /> is largely an outgrowth of the baseline state <br /> and macro economic forecasts. There is some <br /> slight job growth expected for Oregon (0.6 <br /> percent) in 2008, and there is some softening <br /> in the price for crude oil and petroleum <br /> products, particularly in inflation-adjusted <br /> terms. A further prop to our forecast for sales <br /> growth in 2008, and especially in the years <br /> 7 <br /> <br />