Last week, I was asked about possible future trajectories. As of the week ending today, prices are still falling (from $3.23 to $3.14).
exist in public relationsI pointed out that we should enjoy it while we can:
Falling natural gas prices also help lower inflation.
“If oil prices stay at current levels, then we can at least continue to see no increase in gasoline prices, which will allow inflation to continue to fall,” said Professor Menzie Chinn, a Ph.D. in economics at the University of Wisconsin-Madison. .
But Chin warned that world events could cause oil prices to surge rapidly.
“For example, if you see the conflict in and around Israel expand into a broader regional conflict and involve Iran,” he said. “You can imagine that pushing up oil prices, even if outright hostilities don't happen, uncertainty and risk will push prices up.”
Gasoline's weighting in the CPI (2020) is about 2.6%, which doesn't sound like a lot, but since gasoline prices fluctuate so much, they may contribute a lot to changes in inflation in a mechanical sense (see this postal).
Lower gasoline prices, at least non-seasonally, are boosting the economy. As early as 2015, JPMorgan It is estimated that for every dollar that falls in the price of gasoline, spending on other goods and services increases by 80 cents.As a result, lower gasoline prices have helped sustain spending (see Posts by Jim Hamilton Since then).
source: JPMorgan Chase (2015).
