What happened
The financial press has been reporting on the supposed calamitous commercial consequences of record-high diesel prices. However, according to the Energy Information Administration, diesel prices are not at a record high when adjusted for inflation. The current nominal price of $6.28 a gallon is equivalent to $4.12 in 2008 and $5.55 in 2022.
Some news outlets have reported that high diesel prices have led to the bankruptcy of 16 trucking companies in 30 days. However, this claim is based on a single source, FreightWaves, which found that at least 16 trucking companies entered Chapter 7 or Chapter 11 between late August and September 21. The story was then repeated by other outlets, introducing a causal link between diesel prices and the bankruptcies.
In reality, the number of bankruptcies is not unusually high, and the trucking industry has seen similar numbers of filings in previous months. Additionally, many trucking companies have longer-term shipping contracts that allow them to pass through fuel costs to their customers, alleviating some of the pressure from high diesel prices.
Meanwhile, there are concerns that investment in artificial intelligence is crowding out investment in other sectors. However, construction spending data shows that while data center construction is growing, it only accounts for around 7% of total construction spending, which is dominated by single-family construction, manufacturing, and power.