Despite talk of a recession, Americans are starting to feel better about the economy.
Sentiment indicators show that consumers are feeling a lot better. What's the reason? There are gas station price signs.
In the US, gas prices and consumer sentiment are correlated by how much they are seen. Even though gas only makes up 5% of American budgets, it is seen by everyone as an indicator of inflation.
Americans have reason to be more positive. A month ago the national average for a gallon of gas was $4. Gas prices will decline for 13 weeks in a row by next week.
It is possible that consumer spending will hold up in the coming months.
On the west coast, gas prices are spiking because of refinery shutting down in the heat, but on average they are falling. As winter sets in, cars will start filling up with gas for less.
The national average could fall another 25 to 50 cents a gallon over the next couple of weeks, according to Patrick De Haan, head of petroleum analysis at GasBuddy.
Gas prices can change quickly. The potential for storms to knock out refining capacity in the Gulf Coast is increasing. Natural gas supply to Europe could be disrupted by Russia, which could cause oil prices to go up. There is a disease called the Pandemic.
There is still an issue with covid. The US oil production has not returned to pre-covid levels despite the work being done. Even covid is active.
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