Posted May 4, 2015
WH Economist: Oil Price Benefits Near for U.S. Economy
USA Today: The U.S. economy may not be benefiting as much as anticipated from the collapse in oil prices over the past 10 months. In fact, for oil-producing states, the decline of some 50% is taking a toll.
But one thing seems clear: The nation as a whole is nowhere near as susceptible to sharp swings in oil prices — one way or the other — as it was for decades.
That was the message from Jason Furman, the chairman of the White House Council of Economic Advisers and President Obama's chief economist, at a New York forum held by the Columbia University Center on Global Energy Policy.
Furman spoke one day before the U.S. government reported an annual growth rate of just 0.2% for the nation's gross domestic production from January through March, down substantially from a 2.2% pace in the fourth quarter of 2014.
Among the factors was consumer spending, which rose by only 1.9% in the first quarter compared with a 4.4% increase in the previous quarter.
Consumers proved slow to spend their savings from lower gasoline prices, savings that economists estimate at $700 per household, as Furman pointed out. But that reluctance may change soon, to the benefit of the nation's economy, he added.
"I don't think we've seen the full economic benefits of the fall in the price of oil yet because they're still working their way through the system, and it's a process that could take up to a year from when prices started falling," he said.
In short, look for those changes in the second quarter of 2015, now through June, the month when oil prices began their tumble last year.
Read more: http://usat.ly/1Pi1rAE
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ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.