The National Retail Federation said it expects this year's holiday sales to increase by 4.1 percent, above the 10-year average of 2.9 percent and the first time sales growth should surpass 4 percent since 2011. Holiday sales are expected to total $616.9 billion.
Craig Johnson, president, Customer Growth Partners, expects more of the gasoline savings to flow to supermarkets than is realized. "The bigger factor this year is the rise in food prices, particularly center of the plate—meats are at an all time record high. Produce is near a record high, and dairy is at an all time high. If you look at the household budget, people spend two to three times as much on food as they do on gasoline," Johnson said. He added that those figures do not show up in CPI.
Swonk said while food does have an impact, people also make dietary choices, such as switching to pasta from meat, to temper the impact of rising prices.
Read MoreFor some states, cheap oil isn't such a good thing
"There is some offset with food. My expectation is that it will add a couple tenths to overall GDP growth in the fourth quarter," she said. "Since June, we're off on a 12-gallon tank about $6 or $7. That's on the margin. It is extra cash that means something." Consumers are also getting the boost from cheaper gasoline at the same time they are seeing the benefits of actively refinancing their homes again.
As gasoline prices plummeted, consumer confidence soared to 94.5 in October, from 89 in September. But Deutsche Bank chief U.S. Economist Joseph LaVorgna said the consumer confidence jump to 94.5 versus 89 in September, may have more to do with improvements in the job market than the drop in gasoline prices. While gasoline is part of it, he said the gain was more in future expectations.
"It's still early. We were $3.71 in April, then were at $3.70 in June. It's really only in the last six weeks, where prices have moved a lot lower. If it continues to stay this way, it's going to be, in my mind, very additive to GDP. The current drop, if it stays this way would add 40 basis points to GDP. If you have the economy growing at 3 percent, it would be 3.4. If in two months from now, it were to go up $0.40, then we're going to wash most of it out."
LaVorgna said if gasoline prices stay lower, however, the economy should bounce. "If we're getting a positive supply shock as opposed to a negative supply shock, we should see a bounce. A lot of people on fixed incomes, teenagers, college students, people who live pay check to pay check, or whatever, energy is a necessary thing to spend money on. If they don't have to spend as much, that allows them to spend else where," he said.