Hey - maybe Big Oil is patriotically pulling us out of recession.
Falling energy costs may trigger a U.S. consumer-spending revival that’s faster and stronger than most people anticipate, according to James W. Paulsen, chief investment strategist at Wells Capital Management.The CHART OF THE DAY tracks household expenditures on energy as a percentage of disposable income during the past three decades, according to data compiled by the Commerce Department. Paulsen had a similar chart in a report yesterday.
The ratio dropped to 4.4 percent in this year’s second quarter from a peak of 6.3 percent in the third quarter of 2008. The latter reading was the highest since 1985 and coincided with record prices for crude oil, which had reached $147.27 a barrel in New York trading. Crude settled yesterday at $74.15 a barrel, a drop of about 50 percent.
“Changes in the energy burden are at least as important” in determining what consumers spend as shifts in their financial obligations, such as mortgage and consumer debt, Paulsen wrote. [More]
Then too, maybe those hysterical optimists on Wall Street are on to something as well.
It's hard to balance these verdant seedlings easily against dismal unemployment picture. The big question is the delay factor. And whether we have fundamentally changed consumption patterns in the US.