The lowest gas prices in five years may help to alleviate some of the economic hardship.

The national average price of regular unleaded gasoline falls to $1.63 a gallon matching a level not seen since February 2004.  Drivers returning home from the Christmas holiday this weekend will be paying less for gasoline than they have in in five years, according to a survey of credit card swipes at service stations across the nation..

The national average price dropped for its eighth consecutive day to $1.630 a gallon, down 1.2 cents from the previous day, according to the motorist group AAA.  The national average last hit close to the current price on Feb. 18, 2004, when it averaged at $1.63.  Prices are down 60% from the record high of $4.114 a gallon touched on July 17.

As Douglas McIntyre points out these low gas prices may help recovery from the global recession.

The price of gas may be one of the few “recession busters” of this downturn. The most obvious reason is that families who drive even modest distances for work will save several hundreds dollars a month. That leaves more cash to pay for mortgages and to lower credit card balances. That in turn helps arrest falling housing prices as fewer home fall into default and then foreclosure. The ability to make credit card payments should cut bank losses. In other words, low gas prices send a positive ripple though the economy and may boost consumer spending or at least keep it from falling further.

The impact on businesses may be even greater. The largest beneficiary of low fuel prices is airlines which were nearly driven to bankruptcy earlier this year as jet fuel price spiked. But, industries from newspapers to overnight delivery to trucking could be significantly helped as gas drops.

Lower gas prices alone are only a partial solution, but it may be that this will alleviate some of the worst effects of the recession.

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