The Tell: Why plunging oil prices now hurt—yes hurt—the U.S. economy

Falling oil prices are usually greeted with cheers, especially at the gas pump. But for the economy, the equation has changed thanks to the transformation of the U.S. back into a major oil producer courtesy of the shale revolution.

“The key point to remember here is that the lower oil prices are now a net drag on the U.S. economy, because the [capital-expenditure] cutbacks triggered in the shale oil business outweigh the gains to consumers’ spending from cheaper gas prices,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a Monday note.

Read:How plummeting oil prices will affect drivers over Thanksgiving

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