From James Hamilton at Econbrowser: Why didn’t the recent oil price decline help the U.S. economy more? A few excerpts:
Baumeister and Kilian update those calculations and conclude that there was a significant boost to consumer spending, noting that real consumption spending grew on average by 3.1% over the two years since oil prices began falling in 2014:Q3 compared with only 2.0% during the preceding two years. … But gains to consumer spending were mostly offset by a drop in oil-related investment spending.
Their paper examined a number of details of the economic response. The bottom line is that there seemed to be little net stimulus to the U.S. economy from the collapse in oil prices.
• Schedule for Week of Sept 18, 2016
• At 10:00 AM ET, The September NAHB homebuilder survey. The consensus is for a reading of 60, unchanged from 60 in August. Any number above 50 indicates that more builders view sales conditions as good than poor.
Oil prices were down over the last week with WTI futures at $43.67 per barrel and Brent at $46.29 per barrel. A year ago, WTI was at $45, and Brent was at $47 – so prices are down slightly year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.21 per gallon (down about $0.10 per gallon from a year ago).