NEW YORK (MainStreet) -- U.S. gasoline prices remain in decline and West Coast drivers are finally starting to benefit.
On a year-to-year basis, the average cost of a gallon of gasoline is .13 cents less than it was in May 2011, not a remarkable number, but at least gas prices are going in the right direction for consumers as summer beckons.
Here’s a look at U.S. gas prices this week, with figures from the U.S. Energy Information Administration.
In addition to the experiencing the first week over week decline in recent weeks, drivers from San Diego to Spokane have to be feeling especially relieved at the pump. Gas prices on the West Coast are down .24 cents from last year -- almost double the national average year over year decline.
For the U.S., week over week gas prices declined from $3.71 to $3.67, or a decline 0.045%.
On the East Coast, gas prices declined from $3.63 to $3.57, or by 0.062%.
In the Midwest, gas prices declined from $3.63 to $3.59, or by 0.035%.
In the Gulf Coast, a 0.067% decline took gas prices to $3.42.
The Rocky Mountain region saw a one-cent decline to $3.74.
The West Coast's first decline in gas prices in weeks brought the nation's highest average price down by two cents to $4.23.
There are several reasons for the West Coast gas prices action, chief among them the fact that refineries are doing a better and cheaper job of transporting gasoline to major West Coast urban areas. There’s also a more unfortunate reason -- unemployment figures in California are higher than the national average, leaving less people on the road. That reduces demand, and brings the cost of gasoline down. Friday's nonfarm payroll report showed only 69,000 jobs created in the U.S., the lowest level of job creation in a year.
Still, a gallon of gas costs Golden State drivers $4.23 per gallon, the third highest number in the U.S. and highest in the continental U.S., behind only Alaska (at $4.54 per gallon) and Hawaii (at $4.53). Compare those figures to Oklahoma, Arkansas and Texas, which all average between $3.30 and $3.40 per gallon, and California commuters are still getting hammered at the pump relative to other states.
Crude oil has hit a year low because of fears about the global economy slowing and oil prices in the mid-$80s are better for spending than oil prices above $100. The continuing slide in gas prices is welcome on the surface, but underneath lies a more disturbing trend.
Consumers typically pull back on driving when money is tight, and when they think the economy is in trouble. With more economists suggesting that Europe is heading back into recession, and that growth has largely stalled here in the U.S., that negative consumer sentiment might be feeding into a self-fulfilling prophecy that hard times are ahead for Americans.
That sentiment is supported by the Conference Board’s Consumer Confidence Index, which fell in April, and again in May, to 64.9 from 68.7.
Even if the U.S. isn't going back into recession, the latest data isn't exactly saying the economy is going like gangbusters.
"Consumer confidence fell in May, following a slight decline in April,” stated Lynn Franco, director of economic indicators at the Conference Board. “Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook. However, consumers were more upbeat about their income prospects, which should help sustain spending. Taken together, the retreat in the Present Situation Index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate."
When the term "moderate" is used to describe the US economy's growth profile -- as in the language the Federal Reserve has been using all year -- there's a fine line between moderate and flat out slow, or no, growth. It wasn't too long ago, either, that Fed chairman Ben Bernanke had to lace his comments with references to the impact of high oil prices on an uncertain economic recovery.
Lower oil prices and gas prices can stimulate the economy into stronger growth, or represent the calm before the storm of a true bear market. When oil prices went from the high $130s in July 2008 to below $40 by 2008's end, it was a sign of the worst. This week's slide in crude oil prices represented a 15-month low.