The average U.S. household will save about $550 on gasoline costs this year, with spending on track to reach the lowest in 11 years, the Energy Information Administration said Dec. 16.
Gasoline prices are inelastic, meaning they have little effect on demand for the fuel, Feltus said. That leaves people with more money to spend on other products or save, he said.Should help consumers with purchases in other areas of consumption.
A $75B annual price reduction in consumer gasoline would work out to about $6B per month that can be used for other purchases.
Total government spending last FY, at approximately $4.2T was $350B per month average so this $6B monthly potential re-direct of consumer spending into other areas is represents 1.7% of leading USD flow.
The AAA number I assume represents only consumer level savings, any savings by firms perhaps would be an additional change in purchasing amounts on transportation fuels.
The fuel price drop is making its way into the politics below is an interesting twitter picture from Michelle Bachmann taking political advantage of the drop in the gasoline prices in the form of an "I told you so...." wrt to drilling which was a big issue in the 2012 elections:
$2 gas, anyone? pic.twitter.com/JM2ibeP4mE
— Michele Bachmann (@MicheleBachmann) January 2, 2015
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