The national average for a gallon of gas has fallen below $4 for the first time since early March, a key psychological threshold for cash-strapped Americans even as inflation remains elevated.

The U.S. average dropped 2 cents overnight to $3.99, AAA reported Thursday, a 20 percent pullback from its June peak above $5. The run-up in gas prices earlier this year is tied to the Russian invasion of Ukraine and the ensuing turmoil in energy markets.

Relentlessly high inflation is the nation’s most vexing economic problem, prompting months of recession talk even as job growth has soared — U.S. employers added 528,000 jobs in July — and consumer spending has remained resilientBut lower pump prices mean there’s less drag on the broader economy, as evidenced by federal data released Wednesday that shows inflation eased in July. Though overall prices remain elevated, climbing 8.5 percent year over year, they’ve moved away from the pandemic peak of 9.1 percent recorded in June, when the U.S. fuel average topped out at $5.02. The gasoline index fell 7.7 percent in July.

Gas prices may surge again ahead of midterm electio

Crude prices that had been hovering near $80 a barrel in January had pushed past $120 by March, on fears the Russian conflict would curtail supply and disrupt energy markets. Pump prices soon followed, swelling nearly 20 percent roughly a week after the Feb. 24 invasion

But oil prices have been cooling since early June, with West Texas Intermediate crude, the U.S. benchmark, hovering around $91 per barrel on Thursday. Fuel costs are now in line with what consumers and businesses were paying before the wa

Experts say the sell-off is largely driven by worries of a possible recession in several large global economies, which would crimp fuel deman

Economists have been warning of a possible recession in the United States for months. Jeff Buchbinder, chief equity strategist for LPL Financial, said in a Monday note that he thinks the odds of a U.S. recession in the next year are “perhaps a coin flip or better,” despite the Labor Department’s blockbuster jobs reading on Friday. England’s central bank warned last week that Britain would enter a protracted recession by the last quarter of 202

Five charts explaining why inflation is so hi

The National Bureau of Economic Research has not declared the United States to be in a recession, even though economic activity has already declined for two consecutive quarters. Still, fuel demand is already down: As measured as a four-week moving average, it stood at 8.6 million barrels a day as of July 29, according to the U.S. Energy Information Administration. That’s 8.7 percent lower than a year ago

Meanwhile, there is still a possibility that prices could turn around. OPEC, the group of oil-producing nations that includes Saudi Arabia, has only minimally boosted production despite entreaties from President Biden and other world leaders to remedy supply shortfall

Analysts also note that the main culprit behind higher gas p