Lower gas prices not enough to lift US economy - 13 WTHR Indianapolis

Lower gas prices not enough to lift US economy

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WASHINGTON -

With Americans barely increasing their retail spending this spring, several economists are slashing their estimates for growth in the current quarter.

If gas prices stay low, Americans are likely to spend more freely this summer on other goods, from autos and furniture to electronics and vacations, that fuel economic growth. Gasoline purchases tend to provide less benefit for the U.S. economy because some of the money goes to oil-exporting nations.

For example, one economist expects the economy to grow at an annual pace of 1.8 percent in the April-June quarter, just below the first quarter's annual pace. That's roughly in line with other economists' forecasts.

The one major positive development in the past two months is that gas prices have tumbled.

(Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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