Gas Prices Decrease

Gas Prices Drop, But Still Lower Consumer Spending?

It almost seems like the only thing people talked about 2 years ago was the crappy economy and high gas prices. People would talk about how they would go on this trip if the price of gas was just cheaper or that they held off on buying that new TV they wanted so they could save their money for the pump. But the shocking thing is, the gas process dropped tremendously, but the spending did not increase. “ The retail industry is actually on its second month of declined sales for the new year slipping .08% in January” (Reuters). Are people just scared that it’s a very temporary thing? You would think people would be spending like crazy. They now have extra money to blow but they aren’t blowing it on anything. In fact, “ Consumer spending recorded its biggest decline since December of 2009” (Reuben). Now don’t think the economy has tanked even with lower gas prices because it has thrived for sure. We all remember the panic from the recession 7 years ago, and a lot of that panic has dissipated, but that recession changed the mindset of many people. Many are now a lot smarter with their money and choose to save the extra cash they have from paying less for gas. But the economy has still improved greatly as unemployment has gone down, interest rates are terrific for housing, and banks are actually loaning out money again. The low gas prices are great for a short-term boost in the economy in which there was in around June of 2014 when we all started to see gas prices slowly, but surely start to decrease. Gas in Tennessee even got below two dollars a gallon. Sounds like the roaring twenties to me. But now its average is back over two dollars per gallon. Are people already starting to panic and preparing to spend the big bucks on fuel? I guess we will know in time. But in conclusion, consumer spending isn’t just going to continuously go up forever. There will be some declines, that’s just part of it. I think people had...