Detrimental Economic Developments Anticipated to Arise in the Second Half of 2022:
In the latter half of 2022, Washington State residents braced themselves for high gas prices, with the average per gallon cost soaring above $5 in May and June. The peak was particularly pronounced in mid to late June, when prices reached about $5.50 per gallon in Seattle.
This significant rise was a stark contrast to earlier months, as gas prices had been influenced by global supply issues and other factors, leading to high prices during the first half of the year. However, by mid-2024, the average monthly gas prices had started to show signs of easing, with a gradual decrease of approximately $1.78 per gallon from the June 2022 peak.
Despite this easing, Washington experienced a small year-over-year increase in average gas prices as of June 2025, indicating persistent upward pressure locally. This was partly due to a gas tax increase scheduled for July 1, 2022, which added to the upward pressure on pump prices during the second half of 2022.
With these factors in mind, residents should have anticipated high but somewhat stabilizing gas prices during the latter half of 2022. While immediate extreme prices above $5 were most notable in early to mid-2022, the combination of persistent demand, tax increases, and regional factors suggested continued high gas prices through the second half of the year, likely stabilizing somewhat but not dropping drastically below $4 per gallon on average.
Meanwhile, the economy has been facing challenges on multiple fronts. Consumers with low credit scores have been experiencing an increase in defaults on car loans, personal loans, and credit cards, a sign that the healthy consumer lending environment is coming to an end. The Federal Reserve, under Chairman Jerome Powell, has emphasized its commitment to curb inflation, stating they will continue to raise interest rates until inflation starts to fall and the forces driving prices higher fade.
The housing market has also been impacted, with home sales falling for three consecutive months in April due to rising mortgage rates and affordability challenges. An overwhelming majority of Americans (85%) believe it is likely for the country to go through an economic recession in the next year, and jobless claims have now hit a four-month high, suggesting an increase in layoffs as the economy slows down.
Delinquencies on subprime car loans and leases hit an all-time high in February, and the S&P 500 has nearly fallen into bear market territory, leading many to believe that the economic downturn we have witnessed so far is just the beginning. These economic challenges have left many struggling to make ends meet, as exemplified by a post on an internet discussion forum by a single mother expressing her struggles with rising costs of living.
In summary, residents should be prepared for high but somewhat stabilizing gas prices during the latter half of 2022, with some upward pressure from tax changes, even if not the extreme peaks seen in early summer. Meanwhile, the broader economic landscape is facing significant challenges, with many indicators pointing towards a potentially challenging second half of the year.
- The increase in gas prices and the gas tax, combined with the economic challenges such as rising inflation, mortgage rates, and jobless claims, could necessitate a review of one's personal-finance strategies to manage expenses more effectively in Washington State.
- As the economy shows signs of slowing down, with indicators suggesting an economic recession in the next year, it becomes particularly important for businesses to closely monitor their finance and investing activities to navigate through these challenging times effectively.
