Despite concerns that Hurricane Sandy might have hurt gasoline supplies and closed some refineries, gas prices continue to fall, and fall rapidly. According to AAA Fuel Gauge data, the national average cost of a gallon of regular came to $3.470. That was down from $3.543 a week ago and from $3.806 a month ago. Prices have fallen so quickly that only Alaska and Hawaii have average regular prices higher than $4. A month ago, several large states, including California, were above that threshold.
The price drop could not come at a better time. Economic growth faces the reaction of individual consumers and businesses to the so-called fiscal cliff. Most experts believe the reaction will be negative enough to drag on gross domestic product. The Congressional Budget Office has even forecast that gross domestic product could drop early in the year. Any factor that might mitigate a rise in taxes and a decline in government spending might provide just enough stimulus to keep the economy's head above water, if only by a little.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Economy, Oil & Gas