Utter BS....
Cheap(er) oil may not be so great for oil companies, but the economy benefits greatly from people having more disposable income in their pockets when they don’t have to spend as much for their gas.
Of course, Obamacare has nothing to do with it.
All this talk about dropping oil prices, and I’m paying just shy of $4.00 per gallon of gas at the pump.
Someone care to explain that to me.
On the one hand the oil companies are telling me the value of their oil has dropped considerably, and on the other I’m paying near top dollar I’ve every paid for gas.
I stopped reading, as soon as I saw “AP...
The reason is because any savings at the pump is going to higher medical insurance costs caused by Obamacare.
Cheaper gas is adding disposable income into the hands of every American who own a car. I live in a very low cost of living area and lower gas is adding $50/month for me. I imagine the national average would be higher and multiplying that by all Americans annually would equal some billions back into the economy.
The cost of gas obviously affects the price of everything else.
Its also an indicator. Lower gas prices mean more income for the average consumer, and it reduces the cost of shipping for everything.
Its also an indicator that the economy is slowing down. So while I love cheap gas, I also recognize that its telling me something. If you sell cars, or blue jeans at the mall, or your factory sells transformers, your business is probably also falling off. Less stuff being shipped means less pressure on the price of fuel.
AP crapola in defense of a sh*tty economy.
More Obamanomics.
Congratulations, America.
OPEC did not cut production to cause fracking operations to stop.
Next question?
I agree that there's a negative impact of lower oilfield spending. I've argued that increased consumer spending would more than offset that. I could be wrong, but I don't think so in this case.
You've no doubt heard the saying that if you took every economist in the world and laid them end to end, they still wouldn't even reach a conclusion. I've read stunning statements by economists and this one qualifies. Oilfield spending is down, GPD numbers trend down, therefore one caused the other. No.
Second, there's a bias among economists in favor of that which can be measured...if it can't be measured, it doesn't exist. Cutbacks in oilfield and upline spending are relatively easy to measure. The impact of lower prices on the general economy is so diffused as to be impossible to measure. Therefore...
There are so many factors involved in the economy, yet this analysis takes none of them into account. I've viewed the recent dip and bounce as 'dead cat' in nature. I'm amazed that we've seen the economy we have because there are serious, strong, headwinds.
Mature companies and industries are cost cutting at a furious rate. Locally, that includes Boeing and Microsoft. Lots of local hiring and activity by the Amazons, Googles, etc.
Energy factors into too much of the economy but unfortunately there's no direct measure.
Cheaper trucking - not good for US economy.
Cheaper airline flights - not good for US economy.
Lower electricity rates - not good for US economy.
Cheaper fertilizers - not good for US economy.
C’mon $150 bbl oil!
Because the energy sector has been basically carrying the economy at large.
More expert analysis from a person who got a high grade when they took Keynesian Economics as an undergrad.
2 issues he omits:
The price of food has gone up 2%- it should have fallen 5% (approximate) with the 50% drop in oil products’ prices.
So there WOULD have been an increase of 7% in food prices without the drop.
The price of medical care has increased 6.7%.
http://www.bls.gov/news.release/cpi.nr0.htm
Something that struck me from the article: “... led companies like U.S. Steel to temporarily close factories that make the steel pipe used in oil wells”.
Man there just isn’t any growth in our economy. And won’t be with the fiscal drag of the government debt.
Really?
Economists were wrong?
Hoodathunkit?
(Actually, some of us have been saying this domino effect would happen since the price started dropping.)