Despite the recent ups and downs of the stock market that, economists say, could continue through the fall, there are some good news for consumers, Marcia Kramer reports.
Lots of people talk about the value of their 401K retirement accounts going down, but that’s just the beginning of the market impact. The silver lining is that interest rates could also drop.
Besides the price of borrowing money to buy a home or apartment going down, the price of crude oil has dropped by much as $10 a barrel, so relief at the pump is on the way.
“The formula is for every dollar that the price of crude oil goes down per barrel, it’s going to mean a three cent reduction in the retail price at the pump, so we might be looking at as much as a 20 to 30 cent drop,” said Triple A’s Robert Sinclair.
Sinclair cautioned that the drop in gasoline prices won’t be immediate, because station owners will try to hold on to the extra profits as long as possible.
Economists said lower gas prices might lead to a slight increase in back to school sales and also an increase in savings to cope with an economy stuck in neutral.
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2 Responses
The gas companies are quick to raise the proces when the price of oil goes up but very slow to lower prices.
1. Interest rates can’t fall since the key rates, are virtually zero. For those who don’t qualify for the best rates, the primary issue is their own creditworthyness, not the overall economy.
2. Rising unemployment will result in lower demand which will force gas prices down, but unemployment is stable, albeit at a high level. The value of the dollar is now the primary factor and the dollar is likely to be rising in value since the Euro is even more messed up than the dollar, and the franc and yen will likely lose vale since their governments want to force the value down.