STOCK MARKET WATCH -- Monday, 4 November 2013

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10. Gas Prices Are Declining, And It's Turning Into Real Wealth Gains For Americans

http://www.businessinsider.com/macroeconomic-advisers-on-fuel-costs-2013-11

We recently told you how falling gasoline prices provided a cushion to the U.S. economy during the government shutdown
Now Macroeconomic Advisers has further quantified the gains from falling fuel costs.

In a new note, they revise their Q3 GDP estimate up 3/10ths to a "solid" 2.7%.

A major reason, they say, is lower-than-expected consumer prices, thanks in part to declines in gasoline:

Falling energy prices are contributing to gains in real wealth and income: Retail gasoline prices have declined more than 30 cents / gallon over the last two months, to $3.28/gallon as of Thursday, according to the national average pump price compiled for AAA. November gasoline futures have declined by a similar amount. We estimate that the CPI for gasoline declined by roughly 3% to 4% in October, after seasonal adjustment. If retail prices hold near current levels, the CPI for gasoline in November would be roughly unchanged after seasonal adjustment. Over the last eight weeks, the spot price of WTI has declined approximately $15 to near $95/barrel.



Read more: http://www.businessinsider.com/macroeconomic-advisers-on-fuel-costs-2013-11#ixzz2jfw0XVIZ