Answer to Question #57666 in Economics for CEVCleveland

Theoretically, lower fuel/gasoline costs help the economy by lowering prices on transported goods allowing consumers to purchase more goods, etc. Also, theoretically, fuel prices dropping TOO low hurt the economy as lower prices are caused by too high of a supply and layoffs occur as drilling/extraction is cut back.

However, is there a point where the layoffs hit a maximum and the economy continues to benefit if fuel continues to drop in price? If oil/natural gas companies stop drilling at say $35.00/barrel or $2.20 Natural Gas spot price (hypothetical benchmarks) and the price continues to fall, wont all the benefits of lower fuel costs continue to help the economy while layoffs remain fixed at a peak? You can't layoff an oilfield worker if he's alrrady laid off, right?