Gas prices have dropped sharply, with America enjoying a historic oil boom. After years of getting walloped at the pump, drivers suddenly have extra cash to spend, and that's great for the national economy.
People aren't saving that extra money, economists say. Instead, they're buying more gifts for the holidays and planning bigger vacations, pumping more money back into the economy. Forecasters at PNC Financial Services Group estimate that tumbling gas prices will put $39 billion in extra cash into holiday shoppers' budgets this year compared to 2013. That's expected to add more juice to the economic recovery heading into 2015.
Oil prices fell below $75 last week to the lowest levels in four years, a drop largely due to the sharp rise in U.S. production in recent years. The country's shale boom is on track to produce 9.4 million barrels a day next year, the highest levels since 1972.
Gas prices usually track the oil markets, and have nearly been in a freefall as a result. The national average for gas fell below $3 a gallon earlier this month, the lowest level in four years, and is projected to fall to $2.80 a gallon in December. The average price in 2013 was $3.51 a gallon.
Yet while cheaper gas may be making Americans merry this Christmas, it isn't necessarily a long-term blessing. Read on for five reasons that falling gas prices may be a concern.