Increase In Spending Could Top $60 Billion In Year
Gas prices have plummeted in recent months. AAA
says that that the average retail price of a gallon of regular gasoline is down
57 cents since June to $3.10 a gallon, and some projections see large drops
continuing in the coming months. That’s good news for any business that uses a
significant amount of fuel, but there is one potentially better upside for
small business – analysts say that the drop in gas prices could boost consumer
spending by as much as $60 billion over the next year and provide a boost to
the economy as a whole. Bloomberg News reports that analysts at both JPMorgan
Chase and Barclays PLC see this as the case. GasBuddy.com chief oil analyst Tom
Kloza was a bit more reserved. He told CNBC that at current rates, he doesn’t
see a dramatic boost in consumer spending, but that if prices head below $3 per
gallon, “it really could create kind of a warm little glow for the holidays.”
What This Means For Small Business:
For
one group of small businesses, service station owners, the drop in prices
should bring more customers to the pump, more often. For other small business
owners, the news both of lower prices and the potential boost to consumer
spending is a welcome relief.
Additional Reading:
ABC World
News ran a
report on the subject. Yahoo!
Finance
posts a CNBC piece on the impact of the price drop, while Bloomberg
News also
has a report.
Learn more about small business economic trends by visiting NFIB’s Research Foundation.
This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.
