Lack of Oil Investment Offsets Consumer Benefits from Lower Prices

[Smokin Joe]

Lack of Oil Investment Offsets Consumer Benefits from Lower Prices

http://www.oilandgas360.com/lower-oil-prices-provided-zero-net-stimulus-economy-says-brookings/?utm_source=Crude+Oil+%2F+Natural+Gas&utm_campaign=a152b0c274-Crude+Oil+Cuttings_09_21_2016

The 2014 plunge in oil prices was initially hoped to provide stimulus to the U.S. economy, with the Fed arguing that the average household would save $700 in fuel costs. A new paper from the Brookings Institution (https://www.brookings.edu/bpea-articles/lower-oil-prices-and-the-u-s-economy-is-this-time-different/) suggests otherwise.

While higher discretionary income due to lower oil prices boosted consumer spending by 0.61%, the collapse in oil drilling reduced total investment by 0.62%, almost perfectly offsetting the benefits, according to the report.

Other trends, including an increasing propensity to buy automobiles and a positive change in the U.S. trade balance, had small impacts on the economy while non-oil producing segments of the economy failed to step up their investment levels, according to the report. On the other hand, it also states that there has been no evidence that banks....

excerpted  more at:  http://www.oilandgas360.com/lower-oil-prices-provided-zero-net-stimulus-economy-says-brookings/?utm_source=Crude+Oil+%2F+Natural+Gas&utm_campaign=a152b0c274-Crude+Oil+Cuttings_09_21_2016

[thackney]

Too many do not understand the driving force a strong oil/gas industry is on the economy.  They spend massive amounts of money buying products and services.

[Sanguine]

Too many do not understand the driving force a strong oil/gas industry is on the economy.  They spend massive amounts of money buying products and services.

May be that some of them are beginning to understand.