With gas prices falling for seven consecutive weeks after hitting record prices in June, American drivers are finding some respite at the pump. But there is both good and bad news behind the fall in gas prices, say experts.
According to AAA, the average price of a gallon of gas fell Thursday to $4.14 a gallon, while prices fell 8 cents a gallon since Monday. The drop marks a significant return from the all-time record of $5.02 per gallon, which was reached on June 14.
According to Atlantic Council Senior Fellow Ellen Wald, gas prices are falling for a number of reasons, including increased gasoline production and decreased crude oil costs, which are the primary determinants for costs at the pump.
But there’s another reason for the decline, according to Wald, which could indicate macroeconomic issues: Americans are driving cutbacks as a way to tackle inflation.
“We’ve seen some of that in what we call ‘demand destruction’ — people prefer not to buy gasoline because it’s too expensive,” Wald told CBS News.
The US economy shrank in the second quarter, which marks the second consecutive quarter Contracting GDP – which is often considered a hallmark of recession. But that’s not the full picture that has been taken into account by the National Bureau of Economic Research, the group that makes official calls on whether the US has slipped into recession. NBER looks at several other economic indicators including employment, which has remained strong this year.
Still, the contraction of GDP has sparked a debate about whether the nation has entered a recession or is headed for one, with economists increasingly concerned about the signs that consumers may be able to cope. Cutting expenses. Highest inflation in 40 years,
Meanwhile, according to experts, petrol prices may continue to decline, at least in the near term. Patrick De Haan, an analyst at Gas Buddy, wrote that the national average could drop to $3.99 a gallon in a matter of days.
,[I]n ~ 100 hours, we will see the national average fall to $3.999 per gallon, the lowest and first since March 5. “A handful of stations in the US may drop to $2.99/gallon by then.”