TALLAHASSEE, Fla. - As gas prices have plummeted, consumers are seeing more of their hard earned cash back in their pockets. According to Florida TaxWatch’s February Economic Commentary, Americans will realize savings upwards of $140 billion as a result of tumbling prices at the pump. With the extra money, consumers have improved purchasing power that can be spent in other sectors of the economy.
“With various factors causing gas prices to plummet, Floridians will have more expendable income at their disposal,” said Florida TaxWatch President and CEO Dominic M. Calabro. “The average Floridian saw savings between $540 and $700 last year, meaning their hard earned dollars are back where they belong: their wallets.”
The Florida TaxWatch report finds that while plummeting gasoline prices are beneficial for most Americans, the impact is a lot more significant for those who are more susceptible to changes in their income, particularly those in the bottom half. Households earning less than $50,000 often face significant energy-related costs and, on average, spend 21 percent of their after-tax income on gasoline, heating oil and other forms of energy. As a result of lower prices at the pump, those in the lowest income quartile have found their incomes have increased 1.6 percent, giving them additional purchasing power and boosting consumer confidence.
Unfortunately, the oil and gas industry has suffered under the falling gas prices, with more than 250,000 jobs lost globally throughout the industry. States that rely on a bustling oil and gas industry like Texas, North Dakota, Alaska, Louisiana and Oklahoma are starting to see their job growth lag and are feeling an impact on their budgets for the upcoming years.
While some states and the oil and gas industry are seeing some negative effects, low oil and gasoline prices are overall a net positive for consumers. By not pumping their hard-earned money into their vehicles, consumers can instead pump that money into other sectors of the economy.
For the full report, click here.