“Gasoline prices continue to decline very sharply. Over the past month, they are down another 5%, and soon will fall below $3.50. If low gas prices tend to help the economy, gross domestic product (GDP) should get a boost this quarter.
The AAA Fuel Gauge put the price of a gallon of regular nationwide at $3.512 yesterday, down from $3.692 a month ago, as well as from $3.899 a year ago. Other than Hawaii, where the price for regular is $4.385, not a single state has an average price above the $4 level. And $4 often is seen as the mark at which the media and economists say the cost will undermine consumer and business activity, regardless whether that is exactly true.
Oil prices are not a perfect predictor of gasoline prices because, among other things, of the roles of refinery and transport. However, oil is by far the largest contributor to the price. And oil prices continue to fall rapidly. The price of crude sits just below $86, down from a 52-week high of $106, as well as $95 just five days ago. The irony of the price drop is that it is based largely on a drop in global demand, due to the slowing of major economies. In the meantime, the drop will stimulate American GDP….”
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