Pump prices fell to $3.9788 on Tuesday, marking a decrease of approximately 17 cents over the past week and nearly 39 cents over the past month according to AAA. This domestic drop coincides with Brent crude briefly slipping below $90 a barrel for the first time since August as Persian Gulf exports recovered to 80% to 85% of prewar levels. Bureau of Labor Statistics data also showed a sharp monthly deceleration, with overall energy prices rising just 0.7% in October compared to 5.2% in September. Federal Reserve Governor Christopher Waller noted that while the recent drop is welcome, sustained lower prices are required to meaningfully curb broader inflation.
Key points
Pump price relief has been aided significantly by resolving supply bottlenecks and season…: Pump price relief has been aided significantly by resolving supply bottlenecks and seasonal trends identified by Bespoke Investment Group analysts.
Statements from U.S. President Donald Trump bolstered optimism regarding the resolution o…: Statements from U.S. President Donald Trump bolstered optimism regarding the resolution of a nine-month conflict with Iran, easing global crude benchmarks.
Federal Reserve policymakers remain cautious because energy costs are still higher than a…: Federal Reserve policymakers remain cautious because energy costs are still higher than at the start of the year and could pose lingering economic risks.
Sources checked by our analysis pipeline: 1
Americans may finally find some relief at the pump.
The national average price of regular gasoline fell below $4 a gallon for the first time since July, reaching $3.9788 on Tuesday, according to AAA. Prices are down about 17 cents from a week ago and nearly 39 cents from a month ago.
The decline comes after energy inflation slowed significantly in October. Energy prices increased 0.7% during the month, a far cry from the 5.2% surge seen in September, according to the Bureau of Labor Statistics. The BLS' gasoline index increased 1% over the month, after advancing 9.1% in September.
Bespoke Investment Group pointed out that gasoline prices also tend to decline at this time of the year, making part of the recent relief seasonal.
"While lower oil prices have been a tailwind for the relief at the pump, it's also perfectly normal for gas prices to be falling at this time of year, so if they weren't, there would really be something wrong," the firm said.
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