Gas prices to boost consumer electronics spending

It is hard to find statistics on the average per vehicle consumption of gasoline is in the USA. The last figures I saw were about 700 gallons per year. If that is down somewhat since the recession I think we can work on a figure of say 680 gallons per vehicle per year. This means that a two-car family will see 1360 gallons per year.

Prices have fallen close to one dollar of late. This means that your average 2-car family is seeing an addition  of over

$100 per month in disposable income. Note that this is after tax increase – direct to the pocket. While some people may bank this, and others will use it to reduce debt, I think a majority of people will look at it as extra spending money. They will dine on it, go to movies, and buy more, or more expensive, articles that they like – be they clothing or electronic toys.

Some recent news articles have focused on  negative aspects, reduced earnings/profits by the oil companies and the oil production industry, but I feel that over all it will be beneficial.

The important thing here is that the new income gets spread around more or less evenly to all citizens. If you spread $100 million among 100 wealthy people, most of it will not spread out through the economy. But give this in $100 portions to 1 million workers, and it will circulate quickly. This will be good for the economy as a whole. Remember, this savings will extend to other areas as well. There are many people who heat their houses with gas or fuel oil , both of which should also see downward price pressure. Some families could see savings of as much as $200 per month during the winter. All this will add to disposable income.

In particular, this will benefit the electronics industry as the size of the new-found wealth correlates well with the cost of smartphones, computers, etc. Apple, Samsung, HP should all see sales from this new boost to the economy. Travel and restaurant stocks should also do very well.



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