It's not in the headlines, but the national average price of gasoline in the U.S. is creeping ever lower. According to AAA the price of gas has fallen more than a penny in each of the last three days, the first such streak since April. Paul Hickey, co-founder of Bespoke Investment Group, says drivers should get used to the trend.
"The price of gasoline over the last two years has been making a series of lower highs," notes Hickey. "Every time we get a run up people start saying 'there we go, the consumer is going to run out of money, they're not going to be able buy their groceries.' But when prices go down we don't hear anything about it."
Gas prices are still high by historical measures. At a current $3.487 average, gas is 15-cents above where it was a year ago, but a dime cheaper than it was in late May. Part of the blame for the decline, or credit as the case may be, goes to weakness in the global economy. As China slows and American economic growth more or less flat-lines, prices at the pump trend lower. It's a welcome tax cut equivalent for U.S. drivers.
It's not just gas. Hickey says the price of a basket of commodities is lower now than it was at the start of 2008 just prior to the financial meltdown. Some services are seeing inflation but companies are paying less for materials. That's going to translate into either higher margins for corporations in the business of "making stuff" or better prices for consumers. Either way the economy wins.
Obviously there are one-off examples of rising prices popping up around the country, but the trend is working in favor of consumers. Those feeling pain at the pump over 4th of July should remember things were worse for Memorial Day travelers. If the trend continues drivers might have a little extra in their pockets come Labor Day.