The story of falling gas prices is stil just modestly soaking into the media, but it’s an important story.
Goldman’s Kris Dawsey explains what it means:
Retail gasoline prices have declined roughly 40¢/gallon since August, with regular unleaded reaching $US3.20/gallon on a national average basis. This has likely been a welcome support for consumer sentiment, given negativity surrounding the recent government shutdown. It is typical for gasoline prices to decline during this period of the year, with prices usually reaching a seasonal peak in May, declining through the summer and fall, and then hitting a trough in December.
On a seasonally-adjusted basis, prices have still fallen, but the recent decline is less striking. In light of the decline in retail gasoline prices over the past year and our projections for 2014, we see a modest positive growth boost in the pipeline, perhaps in the order of one- to two-tenths. This would represent a favourable tailwind, but not a game-changer on the outlook.