Local gas prices drop by 4.8 cents
Gasoline prices in Chattanooga declined 4.8 cents per gallon in the past week, averaging $2.49 a gallon at the start of this week, the online gas price service GasBuddy.com said Monday.
Chattanooga gas prices remained 32 cents per gallon below the U.S. average and are the lowest among major Mid-South metro areas.
Gas prices nationwide have dropped to their lowest level in six months, but Chattanooga prices are still 39 cents a gallon higher than a year ago and 55 cents a gallon higher than two years ago at this time.
“Saudi Arabia has indicated it is prepared to raise oil production, addressing what had been a major concern ahead of Iran sanctions taking effect,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “Oil prices have fallen over 10 percent in recent weeks, providing the bulk of the gas price relief we’re seeing, and will continue to see for the next week or two at least.”
Consumer spending rises by 0.3 percent
U.S. consumer spending rose in September by a solid, inflation-adjusted 0.3 percent, led by increased spending on health care services and motor vehicles.
The Commerce Department also said Monday that the Federal Reserve’s preferred measure of inflation returned to the central bank’s 2 annual percent target after having been slightly elevated in prior months. In addition, personal incomes rose 0.2 percent in September – the smallest gain since June 2017. Roughly half of that increase was wiped out by inflation.
Consumer spending accounts for the majority of U.S. economic activity, and it was the key driver of overall growth during the July-September quarter. The economy climbed at an annual rate of 3.5 percent in that quarter, helped by the strongest jump in consumer spending in about four years, the Commerce Department said Friday.
But economic growth slowed from a 4.2 percent gain in the second quarter as the pace of business investment fell and continued growth may depend even more on consumer spending.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, expects that consumer spending will begin to slow after having gotten a jolt this year from the tax cuts signed into law by President Donald Trump.
“Spending recently has been boosted by the tax cuts but the incremental boost to spending power is now over,” Shepherdson said.
Fitch downgrades Erlanger rating
The bond rating agency Fitch has cut its ratings for Erlanger Health System after earnings were cut in each of the past two years due to the costly changeover in the computer system used by Chattanooga’s biggest hospital. Implementation of the $100 million Epic electronic health records system reduced Erlanger’s accounts receivable and cash collections after the system began operations n May 2016 and continued for the next two fiscal years.
Fitch assigned a ‘BBB’ Issuer Default Rating (IDR) to Erlanger and downgraded to ‘BBB’ from ‘BBB+’ the rating on the hospital’s debt, which total about $200 million.
Erlanger Chief Financial Officer Britt Tabor said the one notch drop by Fitch to BBB coincides with the current Moody’s rating of Baa2.
“Fitch assigned a stable outlook, based in part on stronger financial performance expected with the Epic install, which is now complete, in addition to significant market share growth in Erlanger’s primary and secondary service areas, as well as double digit growth rate in net patient revenue.,” Tabor said.