Posted on 03/06/2015 7:02:17 AM PST by thackney
The plunge in gasoline prices has generated a windfall for American drivers. But so far, there's little evidence those savings are producing a widely anticipated boost in consumer spending.
So where is all that money going?...
Even though prices didn't fall until late last year, Americans saved some $14 billion on gasoline last year, or an average $115 per driver, according to estimates from AAA. The group figures if pump prices stay tame, those savings could amount to as much as $75 billion this year.
That kind of saving—if consumers spend it elsewhere—could provide a powerful boost to the U.S. economy, much like a tax cut. But, so far, that spending boost isn't showing up in the data.
The latest read from the Commerce Department showed that retail sales in January barely budged after dropping in December. Those figures are echoed in separate government data on overall spending. While outlays on energy-related goods and services plunged in December and January, total personal spending on goods and services also weakened....
Even if gasoline prices stabilize at lower levels, and consumers begin spending the difference, the impact may be less than initial forecasts suggest.
For starters, while a typical consumer might save between $500 and $800 this year, those savings don't come in a lump sum right away, notes Wells Fargo senior economist Mark Vitner.
"On a weekly basis, the savings work out to between $10 and $15, which is meaningful for lower- and middle-income households, but not enough to finance a spending spree, particularly right off the bat," he said....
(Excerpt) Read more at cnbc.com ...
Operative term here being “so far”. Their is a finite number of credits, and they are not seeing a huge demand due to crappy economic conditions. If the economy actually started humming in CA, there would be increased demand for the credits on the open market and the price of gas would probably go through the roof.
"Gosh Wally.. I wonder what that means?"
"What it means, Beaver, is.. THAT'S how they get MONEY out of people."
The supply curve is chasing the demand curve!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.