Up-and-Down Gas Prices Create Another Inflation Headache
Lower costs at the pump mean families have more cash to spend on other things, making the Federal Reserve’s job harder.
US consumers are celebrating the lowest gasoline prices in more than a year. That’s great for families whose incomes were whittled away by ballooning fuel bills earlier this year, but it highlights the inflationary dilemma facing the world’s biggest economy.
Today an American family filling up their 16-gallon tank would pay about $52.20, versus $80.20 back in June. At one fill-up per week, that’s $112 of extra spending money a month. Americans are using that windfall on everything from concert tickets to weekend getaways. The Dec. 1 personal spending report showed that while goods inflation has fallen to 7.2% from 8% a year earlier, services inflation rose to 5.4% from 5.3%.