Dip in gas prices may lift entire economy

Gasoline prices fell by more than 30 cents a gallon last month, and everyone stands to benefit.

NEW YORK

The falling prices are a welcome benefit to consumers who have been grumbling all year about how much more it costs to fill their tanks. With more money in motorists’ pockets, the economy should benefit as well since this is the time of year when consumers tend to spend more time at the mall. In fact, the ripple effect of falling energy prices should help everyone from Detroit automakers to the airline industry to incumbents running for office this fall.

“The decline in gasoline prices has the effect of a tax cut,” says Richard DeKaser, chief economist at National City Corporation, a bank in Cleveland. “Of course it’s only partly reversing the ‘tax increases’ of the past three years.”

Christian Science Monitor