Economists have been debating, for months now, why the big drop in gasoline prices hasn't provided much needed fuel for acceleration in consumer spending.
Some argue that consumers are paying down debt, saving the cash, but not splurging on the goods they typically covet.
Clearly, however, consumers have been spending some of that savings.
First and foremost, car sales remain at elevated, if not record levels. Cheaper gasoline has revved up demand for SUV's, pick-up trucks, and automobiles, in general. Cars have been selling at an annual rate above 178 million units. And, while some of that activity has been motivated by easy credit, including the somewhat ominous build-up of subprime financing, cheap gas makes car buyers much more inclined to hit the dealer showrooms.
Even despite the huge increase in car sales, the average age of an owned car remains above normal, indicating that demand for autos may remain elevated as pent-up demand drives sales — no doubt aided and abetted by inexpensive fuel.
In addition, while it costs less to refuel a car, consumers are refueling their bodies with the savings they are enjoying at the pump.
Steve Blitz, chief economist at ITG, shows that, since gasoline prices began to plunge many months ago, restaurant sales have been going up.
It's abundantly clear that there is a very tight correlation between falling gas prices and rising restaurant sales. In fact, the divergence is plainly evident on the accompanying chart.
Now, where they are eating is not specifically identified. Whether all-day breakfast at McDonald's is the beneficiary, or whether more upscale eateries are winning the food wars is almost irrelevant. The savings are being spent somewhere, contrary to economists' assertions.
That means that the plunging prices at the pump are acting like a tax cut for consumers, something that has always proven to be at least a modest boon to the consumer.
Given the persistent decline in oil prices, thanks to a global glut of crude and soft demand, this situation could persist from some time to come.
Weak industrial data from China drove Chinese shares down 2.5 percent in Monday's trading. Russia is suffering from the enormous drop in crude prices — witness the recent plunge in the ruble. And Saudi Arabia is now running a budget deficit thanks to the plunge in crude.
Despite that, the Saudis and Russians are pumping flat out, attempting to drive competitors out of the market and maintain market share. The longer-term goal appears to be to punish U.S. frackers so that American production declines and prices ultimately head higher.
That could be a tall order. This is not your father's oil market. Frackers can cap wells today and re-open them at a later date, unlike prior periods when once production was shut in, it was shut in for good.
This supply glut may very well continue for some time to come. Currently, gasoline is sliding below $2.00 per gallon, while in some locations around the country are even lower than that.
That's more pain in the oil patch, but a continued gain for the consumer. Given that returns on savings and investments have been meager this year, this is the best news consumers have had in 2015.
There may be more of that good news to come as we enter 2016.
Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.
