Falling Prices Signal Tougher Times Ahead?

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The pain at the pump has eased up in the last few months, with gas prices falling sharply - just one of many commodities seeing a drop in cost.
But those cheaper prices may be a sign that even tougher economic times are on the horizon.

Relief at the Pump

Americans have undoubtedly noticed gas prices have fallen markedly in the last few months to a national average of about $3.53 a gallon.

"Big difference. It doesn't take as much money to fill your vehicles up," one consumer said.

Gas has even dropped to less than $3 a gallon in parts of South Carolina.

"I am glad to see it under three dollars. Yay, we did it," one South Carolina resident said.

One resident remarked, "It's great it's dropping under $3, but it's still a long way from where it needs to be."

Gas prices are falling with the plummeting price of oil, which now hovers just below $83 a barrel, about a 22 percent drop in crude prices from early last month.

The situation is raising concerns about what the Organization of the Petroleum Exporting Countries, or OPEC, will do as they begin meetings today.

"We have over 70 customers worldwide, so we respond to their demands," Saudi oil minister Ali al-Naimi said.

Oil is not the only commodity seeing a dip in price. Gold is down too, along with key agricultural products like corn, wheat, sugar, coffee, and dairy. A United Nations index shows global prices for those food ingredients are down 14 percent since February.

Global Economy Weakening?

But financial experts warn those falling prices are also signs the world economy is getting weaker and may be heading for a recession.

That may be enough to keep OPEC from reducing oil production, which would push those gas prices back up and hurt the global economy.

"Any relief at the gas pump for Americans that at least have jobs, it's good news," Patrick Dehaan of Gasbuddy.com said.

Cheaper commodities don't always translate into cheaper grocery prices. But this time around, MarketWatch reports that last month the price of fresh fruit fell 7 percent, and meat declined more than 2 percent.

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CBN News
Efrem Graham

Efrem Graham

News Anchor & Reporter

Efrem Graham is an award-winning journalist, who comes to CBN News from the ABC owned and operated station in Toledo, Ohio.  He received his master's degree from the Columbia University Journalism School. He also holds a bachelor's degree in English Literature from the Richard Stockton College of New Jersey.  Follow Efrem on Twitter @EfremGraham and "like" him at Facebook.com/EfremGrahamCBN.