The U.S. economy may default, causing a new recession. Mortgage problems also stemming from the federal government may slow housing sales and reverse the rise in prices of homes. And real wages for many Americans may not have improved in a decade. However, one cost that the average consumer is concerned about — gasoline prices — has continued to decline. If the government shutdown continues to be seen as a threat to the economy, the fall could accelerate.
The average price for a gallon of regular gas nationwide fell to $3.346, down from $3.578 a month ago and $3.814 a year ago. But average prices do not mean much in states where gas prices have been highest. However, even in these places, gasoline prices have collapsed fairly sharply.
The states with the most expensive gas tend to be California, New York and Connecticut. Among them they have nearly 20% of America’s population. In these states, gas prices have been near $4, if not above. In California, the average price of a gallon of regular now is nearly $0.15 less than that.
At the other end of the gas prices spectrum, some states have prices close to being less than $3, which would be extraordinary based on prices of the last year. The price in Tennessee is $3.17, in Mississippi $3.122 and Texas $3.123. Granted, these states are mostly near refineries, but they still show that gas prices could fall below the $3 level. That not only is economically important, it has a psychological effect on drivers as well.
With the exception of people who live in some of the largest metro areas, Americans still drive cars. The cost of gasoline competes with the cost of housing, clothing and discretionary income. If the price of gas remains very low by the standard of recent history, there will be at least one thing to cheer consumers. They can go to work or school, or on vacation, without going bust.