The unexpected slump in the national retail gasoline price, from a peak of $3.80 per gallon in the summer to a near four-year low of $3.00 now, will provide a sizeable boost to fourth-quarter real consumption growth, underlining why we think that fourth-quarter GDP growth could still be as strong as 3.0% annualised. The potential downside risks from lower oil prices are limited. At current prices, the knock-on impact on US oil production should be relatively modest, while there is no reason to believe that falling energy prices could trigger a deflationary spiral in the otherwise strengthening US economy.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services