Taking the Under on the Over-excitement from Falling Oil Prices; Government Spending Increasingly Matters More

November 04, 2014   |   November 2014 Bond Updates
There is, of late, a lot of noise being made about the surge of money going into people’s pockets because of the drop in gasoline prices. From June 30 until now, the average retail gasoline price for all grades has dropped to $3.14 from $3.78 (Source: DOE). Assuming an average family has two cars and buys 80 gallons a week (2 fill ups per car per week), the saving amounts to about $51.20 per week or $2,662 for a 52 week year. This savings is not exactly enough to refinish the basement, but it may be enough to alleviate pressures and allow families to draw down less from savings to finance current consumption. Some of this found money is consequently likely spent on small things (eating out), some of it is saved or savings are not drawn down, but large scale acceleration in overall consumption seems unlikely.

View more at: http://www.forbes.com/sites/stevenblitz/2014/11/03/taking-the-under-on-the-over-excitement-from-falling-oil-prices-government-spending-increasingly-matters-more/
 
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