We’ve all been feeling it a bit. That feeling of relief at the pump when it takes $10 less to fill up your tank than it used to. That feeling that a trip out of town isn’t going to hurt your wallet as much as before and that you can relax and enjoy the day. That glorious feeling of a lower price-per-gallon; God bless supply and demand.
Gas prices have dropped nearly $1.25 since they peaked back in May, and according to many analysts they should continue to decrease. This price change at the pumps comes at a time when many Americans can use the, now saved, funds to spend elsewhere. Here’s some information found over at the WallStCheatSheet.com that helps frame the price drops and what Americans are spending:
“Falling gas prices are a windfall for the economy because most Americans spend a huge amount of money on gas. According to the EIA, the average American household spends about 4% of pretax income on retail gas, which worked out to $2,912 in 2012. With just over 115 million households in the country, that’s more than $336 billion, 2.2% of GDP. According to the BEA, we spent even more than that — $421.6 billion in 2012 and $408.7 billion in 2013, about 2.4% of GDP. That’s more money than we spend on Medicaid ($265 billion) and not much less than we spend on on Medicare ($492 billion); it’s more than half of what we spend on defense ($626 billion).”
These numbers come as a blessing to many Americans, and the future continues to look bright for our wallets at the pump. Let’s enjoy this while we can.