Gasoline prices dipped a minuscule amount from $3.975 yesterday. The sudden drop in oil price may bring future belief, but several brokers say the correction is temporary. The comments that gas price will drop $.50 by mid-summer are only speculation.
The most critical false positive from last week, which will shortly be proved wrong, is the assumption that the trend of jobs in April will continue if gas prices remain high. The economy added 244,000 employees last month, more than expected.
But, businesses are almost all certain to curtail costs if their fuel-related costs are near the peak levels they reached in 2008. Delta has already begun buyouts. Other airlines will likely follow. There will be pressure on bricks-and-mortar retailers as gas prices keep buyers at home where they can shop online.
Douglas A. McIntyre
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