Will lower gas prices help the U.S. avoid another recession?
Mon, 27 Jun 2011 19:01:18 GMT —
Unemployment claims have lingered above the 400,000 mark for eleven straight weeks, suggesting the country is heading toward another recession.
But could gasoline prices help America avoid a double-dip downturn?
KRCG TMs Facebook Crew investigates to see if people think prices at the pump can help forestall a recession.
Gas prices were nearly $4 a gallon in May because of the fighting in Libya, but since then prices have fallen almost forty cents.
They are predicted to fall even more after the President authorized the use of petroleum reserves last week.
"I would call it an economic Hail Mary pass, Oil Analyst Steve Kopits said.
Kopits said it's not about supply disruptions, it's about the weakening economy.
"I think there was some skepticism that these oil prices could bring down the economy. I think people are beginning to believe in fact they can, Kopits said.
Most of the people I spoke with Monday said they're thrilled that gas prices are dropping, but they have mixed feelings on how prices will affect the economy.
"I think if the gas prices go down it's going to help stimulate the economy. It's going to help people to start buying a lot of other things and just really help people spend money, Jefferson City Resident Mark Jones said.
"I don't think lowering the gas prices singularly will result not going into a double dip recession. I think they are other factors involved, but it will definitely help the consumer spend money on other things besides gasoline, Cole County Resident Don Long said.
The strategic petroleum reserve holds 727 million barrels of crude oil.
Only the President of the United States can authorize it's use in the event of "a severe energy supply interruption."
Some people don't think the president should have authorized the use of the petroleum reserves now.
"This is not a severe supply disruption, so I really don't think it meets the original mandate for what we should use the SPR for, U.S. Chamber of Commerce Karen Harbert said.
Oil analyst Kopits said the reserve is just like a weapon, there is only so much ammunition to be used before you run out.
Oil analysts estimate the reserves could lower gas prices fifty cents more within weeks.
Tell us what you think. Do you think lower gas prices will boast the economy?
Unemployment claims have lingered above the key 400,000 mark for eleven straight weeks, making it seem like the U.S. is deemed for another recession.
So what can the United States do to avoid a double dip recession?
Will falling gas prices help it out?
Tonight at ten KRCG's Facebook Crew investigates to see if people think lowering gas prices will help out the recession.
So tell us what you think. Do you think lowering the price of gas will help out the recession?