Can Declines In Energy Costs Offset Slowing Global Economies?

Evidence that the slowdown in global economies is beginning to affect the U.S. economy is showing up more clearly in economic reports.

The Commerce Department reported this morning that the U.S. trade deficit jumped 7.6% to $43 billion in September. The culprit was a big decline in exports to important U.S. trading partners Europe, China and Japan. Exports to China fell 3.2%, to Europe by 6.5%, and by 14.7% to Japan. It was the biggest drop in exports in seven months. (Imports were unchanged).

Adding to the problem, the European Commission cut its growth forecasts for the European Union again this morning. The EU says it now expects GDP in the 18-country euro-zone will be up only 0.8% this year, down from its previous forecast of 1.2%, and that growth in 2015 will be only 1.1%.

[Related -Investing In The Smart Home Boom]

Meanwhile, the price of oil, gasoline, heating oil, continues to drop precipitously as supply increases while demand slows with the slowing global economies.

Will the drop in energy costs put enough extra disposable income in the pockets of consumers that domestic buying (65% of the economy) will offset declining exports enough to keep the U.S. economy on its growth track until global economies pick up?