retail). Retail and Food service sales ex-gasoline increased by 4.8% on a YoY basis (2.4% for all retail sales including gasoline).
The headline numbers (retail plus 0.1%) are blurred by the reduced gasoline prices. Today gas at the pump costs about 30% less than last year (fuelgaugereport). Consumers spend less money at the gas pump and they use part of the money for buying other things. A study by the JP Morgan Chase Institute shows that "a typical US household was spending $101 a month on gasoline back when gas prices were high" (econbrowser). So a typical household is saving now $30 a month. The Chase researchers found that for every dollar saved at the gasoline pump consumers spend 73 cents extra on other items. I don´t have numbers for Europea and China, but it is clear that the consumers there (and many companies) also are benefitting from cheaper energy.
These numbers refute the gloomy comments and predictions. As long as US consumers spend about 5% more for goods the economy will stay healthy. I believe that the reduced expenses for gasoline - and also for heating oil and natural gas - will encourage consumer spending in the coming months and foster the important holiday season. I think that oil - and other commodity prices - will stay low for a decade at least thanks to the technological progress which is reducing the costs for oil exploration, mining & farming.
Today`s situation reminds me of the mid 1980s. Then the oil price also
collapsed and commodities stayed cheap through the year 2000. Cheap
commodities in combination with falling interest rates and a
technological revolution (Internet) lead then to a period of prosperity
(with the exception of 1992 as the first Iraq war caused an oil price
spike which lead into a mild and short-lived recession), the longest
boom in U.S. history.
Maybe we are at the begin of a golden epoch again.