NC State Economist Mike Walden – “Clash of the Stronger Dollar and Cheaper Fuel”
Mary: I’m Mary Walden, with economist MW, welcoming you to the economic perspective. Today’s program looks at the clash of the strong dollar and cheaper fuel. Mike, economists say there were two big events driving the economy of the last six months – the plunge in gas prices and the jump in the dollar’s international value. Both would seem to be pluses for the economy, but I understand it hasn’t worked out that way. What happened?
Mike: Summary Answer
- Consumers were supposed to spend their fuel savings, but have not
- Stronger dollar may sound good, but weakens our exports and increases imports – displaces domestic production
- Still, fuel savings was supposed to trump, but hasn’t
- First quarter gdp growth was very low – under 1% annually
- But probably too early to worry much
- Have had weak first quarter numbers for several years based on the weather
- Big question – will households start to spend their fuel savings
- I’m MW
Mary: And I’m Mary Walden for the North Carolina Cooperative Extension Service
