(Sept 11): The world’s pain is America’s gain.

Weak economic growth in Europe and the rest of the world is leading to lower energy prices and interest rates in the U.S. Gasoline prices nationwide have dropped 24 cents per gallon since the start of June on ample oil supplies worldwide. The yield on 10-year U.S. Treasury notes, meanwhile, was 2.54 percent yesterday compared with 3.03 percent at the start of the year, dragged down by falling rates in Europe.

“The U.S. looks golden,” said Allen Sinai, chief executive officer of Decision Economics Inc. in New York. He sees the economy expanding by about 3.5 percent in the year ending June 30, 2015, and the Standard & Poor’s 500 Index rising to 2,100 by the end of this year. The stock gauge was 1,995.69 as of 4 p.m. in New York yesterday.

Sinai, who has been tracking the U.S. and world economies for four decades, likened today’s situation to that of the late 1990s. Back then, “a wave of investments washed over into the U.S.” and energy prices plunged as rolling financial crises throughout Asia undercut global economic expansion.

The current tailwind from overseas is a plus for Federal Reserve Chair Janet Yellen and her colleagues at the central bank. Falling global oil prices will help hold down inflation in the U.S., while lower Treasury yields will aid in boosting growth and reducing unemployment.

Such a sanguine outlook would darken if slowing growth outside the U.S. leads to renewed worries about a breakup of the euro currency zone or a hard landing of the Chinese economy, said David Hensley, director of global economics for JPMorgan Chase & Co. in New York, who added that he doesn’t expect this to happen.

Disrupt Markets

Those fears, if they do arise, probably would disrupt financial markets in the U.S. and prompt American businesses to hold back on spending and hiring, undercutting the expansion in the process.

Gasoline prices at the tail end of the summer driving season were the lowest for the period since 2010, the U.S. Energy Information Administration said in an Aug. 29 note. The “main driver” was North Sea Brent crude oil prices, which were depressed partly by weaker global demand, the Washington-based government agency added.

“It’s largely China,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “Their growth rates are continuing to throttle back, and they’re the marginal consumer of most commodities, including energy.”

Worsening Surplus

Brent crude dropped to a 16-month low on Sept. 8 as falling Chinese imports bolstered concern about a worsening worldwide oil surplus. Inbound shipments to China slumped 2.4 percent in August, data from the Beijing-based customs administration showed. Growth in China, the biggest oil-consuming country after the U.S., will slip to 7.4 percent this year, the slowest since 1990, based on economist estimates compiled by Bloomberg.

Europe and Japan also are weak. The euro-area recovery stalled in the second quarter, with gross domestic product unchanged from the first, according to Eurostat, the European Union’s statistics office in Luxembourg. Japan contracted by the most in more than five years, with GDP shrinking an annualized 7.1 percent, data from the government Cabinet Office in Tokyo show.

That’s depressing bond yields overseas. The average yield for 10-year German bunds auctioned by the government yesterday was 1.05 percent, while 10-year Japanese government bonds were at 0.545 percent.

‘Dramatically Higher’

“It’s pretty hard for U.S. interest rates to move dramatically higher” if German bunds and Japanese government bonds are much lower, said Rick Rieder, chief investment officer of fundamental fixed income for New York-based BlackRock Inc., which manages $4.32 trillion in assets.

By nudging the euro area closer toward all-out quantitative easing in an effort to lower the region’s bond yields, European Central Bank President Mario Draghi is pushing European investors into U.S. Treasuries, Pierre Lapointe and Alex Bellefleur of Montreal-based brokerage Pavilion Global Markets said in a Sept. 4 report.

Euro-area residents owned $3.4 trillion in long-term U.S. Treasuries as of the end of May, up from $2.8 trillion a year ago, according to U.S. Treasury Department data.

“We suspect that European accumulation of Treasuries will only have accelerated since then, as it has become increasingly obvious that QE in the euro zone is about to happen,” Lapointe and Bellefleur said.

Fed Window

The ECB is providing the Fed with a “window” to begin raising rates without risking too big an impact on Treasury yields and the economy, Rieder said. He sees a Fed increase as soon as March. The central bank has kept its target for the overnight interbank interest rate at zero to 0.25 percent since December 2008.

Demand in the U.S. for cars and light-duty trucks is particularly helped by the low financing costs and cheaper gasoline stemming from slowing international growth. Vehicle sales rose to a seasonally adjusted annual rate of 17.5 million in August, the most since January 2006, according to data from Ward’s Automotive Group.

“Confidence is up, spending growth is out there in the marketplace, interest rates are very stable, fuel prices are pretty stable,” Bill Fay, Toyota Motor Corp.’s U.S. sales chief, said on a Sept. 3 conference call. “It’s really pretty much a perfect, or pretty darn close to perfect, situation out there in the economy.”

Increased Borrowing

Consumer borrowing in the U.S. rose in July as nonrevolving loans, including those for cars, jumped the most in three years. The $26 billion increase followed an $18.8 billion advance in June, according to Fed data.

“People are clearly starting to feel more confident, and we’re also probably seeing some pent-up demand,” said Matt Schulz, senior industry analyst in Austin, Texas, at CreditCards.com, an online credit-card marketplace.

Retailers are seeing some of the benefits. Chain stores saw same-store sales rise 5.2 percent in August from a year earlier, with apparel companies recording their highest gain in four months, according to an index compiled by The International Council of Shopping Centers in New York.

Households aren’t the only ones taking advantage of the lower interest rates: Company treasurers are, too. Corporate bond issues rose to $24.3 billion on Sept. 3 in the busiest session this year as the market powered back after the slowest August since 2008.

Debt Sales

Ford Motor Co., the second-largest U.S. automaker, and home-improvement chain Lowe’s Cos. were among companies that sold debt. The total beat the $23.45 billion issued on March 5 and was more than triple the average daily volume of $6.9 billion during the past 12 months, according to data compiled by Bloomberg.

“Our relationship with the world is, on net, a positive for the economy,” Zandi said. “Our export growth is soft because of weak conditions overseas. But we’ve been an enormous beneficiary of capital inflows” and lower energy costs.