The cause of it all: Brent crude oil fell more than $2 a barrel this morning to a new five-year low on predictions that oversupply would keep building until next year after OPEC decided not to cut output. As Reuters reports, in a report dated Dec. 5 U.S. investment bank Morgan Stanley says oil prices could fall as low as $43 a barrel next year. The bank cut its average 2015 Brent base-case outlook by $28 to $70 per barrel, and its 2016 outlook by $14 to $88 a barrel. Read the full story.
Call and response: Many businesses are boosting hiring and investments with the money they’re saving on fuel as slumping oil prices bolster a resurgent U.S. economy. As USA Today reports, airlines, freight haulers, repair services, farmers and manufacturers are among businesses that could save billions of dollars a year from tumbling fuel costs. Goldman Sachs estimates that fuel cost savings invested by businesses and governments will boost economic growth by 0.1 to 0.2 percentage points over the next year, to a projected 3% overall. Read the full story.
The bottom line: The U.S. economy, helped by a stronger job market and falling oil prices, should enjoy the fastest economic growth in a decade next year, according to a panel of top business economists. The National Association for Business Economics announced this morning it expects the overall economy, as measured by the gross domestic product, to expand by 3.1% next year. That would be the strongest GDP growth since 2005, when the economy grew 3.3%. The U.S. has been stuck with sub-par growth, averaging 2.2% per year in recent years. The NABE forecasting panel is composed of 48 economists. The Associated Press has the full story.
