President Obama has touted this week’s Census report on poverty and income as evidence that his economic policies are working.
“We lifted 3.5 million people out of poverty–the largest one-year drop in the poverty rate since 1968,” he said Tuesday.
But the claims obscure an actor who inadvertently helped boost American incomes last year: the Government of Saudi Arabia.
The data released by the Census Bureau showed that inflation-adjusted median incomes had increased for the first time since 2007, by an impressive 5.2 percent.
This occurred amid plummeting oil prices that drove down the average rate of inflation in 2015 to just over 0.1 percent. Between 2010 and 2014, the average rate of inflation was at just below 2 percent.
The Saudi government, in late 2014, sent already-declining oil prices tumbling even further, by increasing production. Oil was at $100 per barrel, as recently as September 2014. By the end of December 2015, it was down to $37 per barrel.
The move, undertaken to boost market share, appears to have paid off. The United States had surpassed Saudi Arabia as the world’s largest oil producer in April 2014. The Saudis reclaimed that title in August, according to a report published Tuesday by the International Energy Agency.
Meanwhile, American consumers are benefiting, for now. In February, Federal Reserve Chair Janet Yellen said that lower energy prices would see the typical American save $1,000 on an annual basis.
