NEW YORK (MainStreet) -- West Coast consumers are really starting to see a break on gas prices, as the average price of a gallon of gas fell below $4 per gallon for the first time in months, from $3.96 per gallon from $4.09 to, according to government figures released Monday.
The rest of the country continued to see gas prices slide, although not as sharply as West Coast drivers, with Midwest consumers seeing the biggest price declines and Rocky Mountain regional consumers seeing the weakest price declines.
It’s business as usual on fuel prices this week, as consumers are pulling back on demand as they weigh disturbing economic news coming out of Europe and as the price of oil falls below $80 per barrel (to $78 on Thursday).
Industry analysts also point to a lousy manufacturing report from the Philadelphia Federal Reserve that essentially means U.S. companies are holding back on big capital investments.
In addition, the U.S. Labor Department says hiring remains flat and sales of existing U.S. homes fell 1.5% in May, primarily because of a dearth of “for sale” homes on the lower end of the housing market scale.
Even after a steady rate of bad economic news, though, lower gas prices may stimulate the U.S. economy, if only for the short term.
How so? Because lower gasoline prices means more consumers hitting the highways this coming Fourth of July holiday, presumably spending more money in the process.
AAA reports that 42.3 million Americans will journey 50 miles or more from home during the week of the Fourth (the holiday falls on a Wednesday this year), a 4.9% increase over the 40.3 million people who did the same last year. “The expected 2012 Independence Day holiday travel volume will tie the past decade’s previous high mark set in 2007 and represents a near 42% increase from 2009,” AAA says.
And why not? AAA says that as recently as April 6 the average price of gas across the U.S. was $3.94 per gallon. Now, with prices at $3.53 per gallon, traveling seems more affordable.
In a sea of toxic economic news, at least consumers are getting a break at the pumps. Expect that break to hang out for a while -- at least through the holiday.