Washington: A reduction in the global oil prices is net positive for the US economy, the White House has said, pointing out that for the first time in 2014 America is now exceeding both Saudi Arabia and Russia in oil production.
"In 2014, for the first time, the US is now exceeding both Saudi Arabia and Russia in oil production," Jason Furman, Chairman of the Council of Economic Advisors, told reporters.
"Earlier, we came to exceed both of them in natural gas production. That combination of an increase in production -- a total of 3.5 million barrels per day, the equivalent to discovering a new Iraq here in the United States -- has combined with the fact that we?re using less oil.
"We're using 1.8 million barrels per day less. That's the equivalent of no longer needing the oil from an Angola or a Norway - has contributed to the fact that global oil prices have fallen more than 40 per cent, something that?s also helping the US economic recovery," he said.
Responding to questions, Furman said the reduction in gas prices is a net positive for the US economy.
The International Monetary Fund said they expect to see advanced economy growth rates on average rise by about eight- tenths of a percentage point as a result of the lower price of oil.
"There is no doubt that there's winners and losers in the global economy from these changes in gas prices and that that is contributing to some turmoil in the global economy. There?s no doubt that the biggest risk to the US economy is the impact the rest of the world could have on our economy because we have such strong domestic strengths. On balance, this is definitely a positive, but we're certainly monitoring both sides of the ledger," he said.
The Wall Street Journal today said consumer prices around the world are pulling back so rapidly, along with the collapse of oil prices, that official measures of inflation have yet to capture the magnitude of the decline.
White House Press Secretary Josh Earnest said 2014 was a milestone for economic progress in the United States, but there?s much more work to do.
"This year, America's businesses added jobs at the fastest rate since the 1990s.?We've now had 10 consecutive months of more than 200,000 job created in the private sector in each of those months. That is the longest streak in nearly 20 years," he said.
"While many of these good, full-time, middle-class jobs and wages have begun to rise, it's still too hard for many middle-class families to get ahead. And while gas prices have fallen as we've produced more oil, and the growth of health care costs has slowed as the Affordable Care Act has been implemented, it's still too hard for many middle-class families to make ends meet," he added.
"So our task now that we've recovered from the worst economic downturn since the Great Depression is to build on the momentum of the last six years so the economy grows, jobs grow, and wages grow. Our work will not be done until the middle class is thriving and anyone who works hard and plays by the rules has a fair shot," he said.
