Cheap gasoline is a real psychological boost.
It’s not a huge deal in most folks’ budget, but so rare to see something getting cheaper.
When you have two people working in a family and driving 30+ miles ONE WAY to work in population centers a doubling of gas prices adds hundreds of dollars a month to the family expenses.
As a car averages 20 miles per gallon a sixty mile daily commute would cost $4.50 a day per driver at $1.50 a gallon. At $4.00 per gallon, close to the average the last six years, it is $12 a day per driver. A difference of $7.50 a day or $150. per month. PER DRIVER or $300 per month per household.
Many suburban households where so tight that the additional $300 per month caused them to fall behind on credit cards, car loans, and even mortgages. Add in a rocky job market and disaster happens.
In some exurban communities, more than 25% of all home loans where X's 3 delinquent.IE: they where either IN or heading into foreclosure.
$35 per barrel is right around where oil should be based on the massive amount of recoverable oil that we have available. Certainly less than $40 is called for. Couple that with soft demand. Especially in China, where it WILL NOT recover, and we have a recipe for cheap gas for the next decade. Not even Obama can screw this up, though he is trying.
I think it's very significant. I Fill up 2x a week. The price drop is an extra $50 a week in disposible income. When everybody in America suddenly gets an extra 10% in disposible income, that's a lot of money that gets spent into the economy.