Monday, September 26, 2022
HomeBusinessFalling gas prices have been easing pressure on inflation.

Falling gas prices have been easing pressure on inflation.

Gasoline prices in the United States have fallen for 57 consecutive days since reaching a high of more than $5 a gallon in June.

The national average price of gas was $4.01 on Wednesday, according to AAA. That’s higher than it was a year ago but still well below the record of nearly $5.02 in mid-June (not adjusted for inflation). Energy costs feed into broad measures of inflation, so the drop is also good news for policymakers who have made limiting the fuel price increases a priority.

The drop reflects a number of factors: Weaker demand because high costs have kept some drivers off the roads; a decline in global oil prices in recent months; and a handful of states suspending taxes on gasoline. The decline has been welcomed by the Biden administration, which for months has been orchestrating a campaign to lower gas prices and criticizing energy companies for profiting at the expense of American consumers.

The drop in the price of gas is also a positive signal for the economy, as businesses face less pressure to pass energy costs on to their customers — a move that would add to the country’s inflation problem.

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