Plunging Oil Prices Puts Money In The Pockets Of Those Who Need It Most
Last week, RBC Capital Markets put out a note estimating that the average American household will save around $42 per month on gas over the next year if prices stay as low as they currently are.
This is particularly good for low-income Americans. It's basically a tax cut, says Deutsche Bank's chief US economist Joe LaVorgna.
"If the price is falling, it's a tax cut in that you don't have to pay for other things," LaVorgna said. "If you are on a fixed income or a student or a lower wage worker, that's money in your pocket."
If you are living paycheck-to-paycheck with very little savings, this is a much bigger deal than if you had a little bit of cushion you could dip into when gas prices went up a few years ago.
And this isn't just about gas prices, says LaVorgna. It also will affect heating and cooling prices. "It won't just be gas, energy prices are so highly correlated that people are going to get some benefit this winter."
Where will that extra money go? "If I had a guess i would think restaurants and retailers would probably benefit the most," LaVorgna said.
The people receiving this energy price relief are more likely to spend than save. This is great news for an economy that's largely driven by personal consumption.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
- Experts warn of rising temperatures in Bengaluru as Phase 2 of Lok Sabha elections draws near
- Axis Bank posts net profit of ₹7,129 cr in March quarter
- 7 Best tourist places to visit in Rishikesh in 2024
- From underdog to Bill Gates-sponsored superfood: Have millets finally managed to make a comeback?
- 7 Things to do on your next trip to Rishikesh