Tags: Altman | oil | economy | US

Evercore's Altman: Oil Price Plunge a 'Big Plus' for Economy

By    |   Tuesday, 13 January 2015 11:55 AM

In recent days, much of the discussion surrounding the collapse of oil prices, which hit yet another 5 ½-year low Tuesday, has centered on the damage it will do to the energy sector.

But former Deputy Treasury Secretary Roger Altman, founder of Evercore Partners, stresses the beneficial impact of lower oil prices.

"The energy price change is a big plus for the United States," he told CNBC. "It's the equivalent of a $200 billion stimulus. Yes, there are some disruptions in the downside, but . . . I draw the focus on the positive."

Altman is bullish on the economy, which grew an average of 4.8 percent in the second and third quarters. "We're going to have good [economic] growth this year, and we're going to have a good rate of job creation," he said. "I think we will see some wage growth."

The economy created 2.95 million jobs last year, the most since 1999. But average hourly wages advanced only 1.7 percent in the 12 months through December, the lowest increase since October 2012.

Many economists expect growth of around 3 percent this year.

"A lot of things are going right for the United States."

As for oil, CNBC Senior Contributor Larry Kudlow agrees with Altman. "This is a gigantic tax cut for the American economy," he said last month on Newsmax TV's "The Steve Malzberg Show."

"It's not a marginal tax rate reduction, I'm just saying it has the same impact. People will have much more disposable income to spend on other goods and services, and the middle class needs that because they've not had big wage gains."

The oil price drop will help corporate America too, Kudlow said. "Businesses need this. Manufacturing companies and retailers and everybody else, they all have fuel costs, they all have heating costs."

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In recent days, much of the discussion surrounding the collapse of oil prices, which hit yet another 5 ½-year low Tuesday, has centered on the damage it will do to the energy sector.
Altman, oil, economy, US
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2015-55-13
Tuesday, 13 January 2015 11:55 AM
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