In one of my columns a couple of weeks ago about some cautionary economic data, I mentioned a bright side: the probability of falling gas prices.
According to GasBuddy, gas prices per gallon have fallen about 20 cents since their peak in early May. Check out this graph. Even in just the last week, average area gas prices have fallen from $3.79 to $3.68 per gallon. For an up-to-date list of the highest and lowest priced gas in the area, go here.
I’ve been concerned for months that some unforeseen hit to the economy could push us back into recession — and a gas price spike was obviously one of the biggest fears. In part because of the economic slowdown that higher prices might produce, prices are falling across the country. It’s worth noting that this decline also is further evidence that the inflation hawks might be too worried; those hawks have almost certainly been given too much credence by policy makers. Core inflation remains low, but the recent run-ups in food and energy costs have caused renewed fears of a surge in inflation. With gas prices slipping significantly, maybe policy makers and politicians will have a little more impetus to focus on the major problem our economy faces: unemployment.
For those who want to look more deeply at this issue, there’s a great discussion about the impact of higher gas prices on the economy as a whole in a post — “Will high oil prices bring a new recession?” — at Econbrowser.