Consumers and Small Businesses Find Economy's Silver Lining at the Gas Pump
Wednesday, November 26, 2008
Stacie Banks can trace the merciful descent of gas prices in recent weeks from the Exxon Mobil credit card bills she keeps after filling her Ford Econoline van every few days.
Oct. 14 -- $100
Oct. 18 -- $93.99
Oct. 29 -- $82.01
And just last Saturday, Nov. 22 -- $60.
The recent plunge in gas prices from their historic highs this summer has meant relief for Banks and her family, who use their van and two Honda Elements to deliver arrangements of orchids, chrysanthemums, carnations and Gerber daisies throughout the Washington area from Lee's Flower and Card Shop on U Street in Northwest D.C.
"It is helping us out a lot, needless to say," Banks said Tuesday morning, riffling through the credit card bills she keeps piled in a cardboard box at her store. "We use a lot of gas around here."
Falling gas prices have become one of the few bright spots in an economy otherwise marred by a series of troubles. Indeed, a key measure of consumer confidence released on Tuesday showed a moderate uptick, which economists attributed largely to the drop in the cost of gasoline. But for many, the good news is overshadowed by ever-deteriorating home values, job losses, spending cuts, the credit crisis, bank failures, foreclosures and so on.
"When gas prices were going up, that was clearly dragging consumer confidence down," said Brian Bethune, chief U.S. economist for IHS Global Insight. "Now the problem is that consumers have gotten more worry beads: They are continuing to see their 401(k) plans evaporate, they are worried about their jobs, they are concerned about the economy, and they are hearing a drumbeat of bad news."
Gas prices are falling largely because the global economy is slowing, easing demand worldwide.
Gasoline prices continued their decline Tuesday, falling 2.3 cents to an average of $1.885 per gallon for regular unleaded, its lowest level since September 2004, according to AAA. In the Washington area, the average price for a gallon of gasoline was $1.93 yesterday, a decline of 53 percent from a high of $4.095 in July.