Less spent at the pump means increased spending on gifts, travel during holidays

ANDREW KHOURI AND SARAH PARVINI -- Los Angeles Times

For the first time in four years, Los Angeles drivers are paying less than $3 on average for a gallon of gasoline, part of a nationwide free-fall in fuel prices that could provide a substantial boost to the economy.

Because they're spending less at the pump, Americans are expected to shell out more on holiday gifts, parties and travel this year. Airlines are projected to pass some of their fuel savings along to consumers next year. Businesses with previously hefty fuel bills may find room now to lower prices or increase wages.

"It's a big plus for the economy," said Mark Zandi, chief economist at Moody's Analytics.

If gas prices stay low, Zandi estimated that U.S. consumers could find an extra $100 billion in their wallets next year compared with this year. "It could make the difference between a good year and a great year."

For real estate agent Amber Dolle, lower totals at the service station are a welcome sight.

Dolle figures she spends more time in her Subaru Forester than in her office, zipping around the San Fernando Valley to preview and show homes. The stop-and-go of city driving, she said, can eat into her budget, especially if a client doesn't close on a house.

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