Lower gas prices not boosting economy - Cleveland 19 News Cleveland, OH

Lower gas prices not boosting economy

Experts say gas prices have more economical impact than we realize. (Source: WOIO) Experts say gas prices have more economical impact than we realize. (Source: WOIO)
Gas prices are still fairly low these days, and that is keeping money in people's wallets.
 
Typically, when Americans have extra money, they often spend it, which helps to drive the economy. But it turns out the cheaper pump prices are not providing a boost. Economists say many consumers are playing it safe and holding onto their money.
 
"The recovery, at least from a labor market standpoint, out of the last recession, has been sluggish," said Vasilios Kosteas, an associate professor of economics at Cleveland State University. "A lot of households are still trying to shore up their finances."
 
Experts state many Americans are working to rebuild their savings and reduce their debts. That means saving more and spending less.
 
Julia Cipollone says she has more disposable income, due to lower gas prices. 

She tells us why she's saving it:
 
"Because I could, and it's nice to save up for something that I want later."
 
Americans spent $6.7 billion less at gas stations in January than they had two months earlier. But things, like retail sales, declined during that period.

In our area, winter weather also has an impact on the economy. That's not surprising to professor Kosteas.

"Maybe you want to take the family out to dinner, but who wants to bundle up the kids and get into a car and go out to Friday's or Applebee's?" Kosteas said. "It's a lot easier to just order a pizza. You're not going to be spending that much when you do that."

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