Tags: Ron Insana | gasoline | tax cut | consumer spending

Ron Insana: Cheaper Gas Is Like a Tax Cut for Consumers

Ron Insana: Cheaper Gas Is Like a Tax Cut for Consumers
Ron Insana (roninsana.com)

By    |   Wednesday, 30 December 2015 07:00 AM


Consumers really are spending all the money they are saving at the pump from lower gasoline prices, despite the claims otherwise by many economists, says Ron Insana, a CNBC and MSNBC contributor.

“The plunging prices at the pump are acting like a tax cut for consumers, something that has always proven to be at least a modest boon to the consumer,” Insana, the author of four books on Wall Street, wrote on CNBC.com.

“This supply glut may very well continue for some time to come. Currently, gasoline is sliding below $2.00 per gallon, while in some locations around the country are even lower than that,” Insana says. “That's more pain in the oil patch, but a continued gain for the consumer. Given that returns on savings and investments have been meager this year, this is the best news consumers have had in 2015. There may be more of that good news to come as we enter 2016.”

Insana while auto sales have also been at healthy levels, “it's abundantly clear that there is a very tight correlation between falling gas prices and rising restaurant sales.”

For sure, Steve Blitz, chief economist at ITG, says that, since gasoline prices began to plunge many months ago, restaurant sales have been going up.

“Now, where they are eating is not specifically identified. Whether all-day breakfast at McDonald's is the beneficiary, or whether more upscale eateries are winning the food wars is almost irrelevant. The savings are being spent somewhere, contrary to economists' assertions,” Insana says.

Newsmax Finance Insider Joel Naroff agrees that ‘tis really is the season for consumers to open their wallets and spend.

"It looks like it was a pretty good holiday shopping season and if so, it is because people are feeling good about their job situation," Naroff wrote.

"MasterCard reported that between Black Friday and Christmas, sales, excluding gasoline and vehicles, jumped a robust 7.9%, leading to a decent 4.6% rise for November-December period," he said. "Given all the sales that occur post Christmas, it looks like consumers spent a lot of money this year. And when you consider that vehicle sales were off the charts, the shopping season looks even better," he said.

"It is good to see that people still found their way either to the malls or their favorite websites to spend, spend and spend some more."

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Consumers really are spending all the money they are saving at the pump from lower gasoline prices, despite the claims otherwise by many economists, says Ron Insana, a CNBC and MSNBC contributor.
Ron Insana, gasoline, tax cut, consumer spending
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2015-00-30
Wednesday, 30 December 2015 07:00 AM
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