Consumer confidence has stalled and along with a weak job market, motorists are pocketing the savings they are receiving off of lower crude oil prices at the pump instead of spending more.
Prices have been dropping over the economic woes in Europe.
The Wall Street Journal says prices are currently at $3.53 a gallon for the week ended June 18, down 10% from this year’s peak of $3.94 in early April—the 11th straight week of declines.
Spending has decreased on restaurants, building materials and recorded music as gas prices decreased. This is in stark contrast to February where holiday spending helped keep the economy afloat.
A 10-cent drop in prices can add about 0.1% to disposable household income, the Energy Information Administration estimates.
Many economists skeptical
“I am not sure [lower energy prices] will drive the economic recovery,” said Kay Smith, a senior economist at the EIA. “There is enough economic uncertainty concerning the employment situation.”
Even though gas prices are dropping, prices for other things are skyrocketing.