Gasoline prices are climbing again, raising fears that the already slow economic recovery could be further threatened. The national average hit $3.12 a gallon this week, 13 cents higher than a month ago and 38 cents higher than the same time last year. And the U.S. Energy Information Administration says that with increased global demand pushing crude oil prices to their highest point since 2008, prices at the pump could reach $4 a gallon during the summer driving season. Will rising gas prices send the economy into another tailspin?
It is 2008 all over again: The economy sank when fuel prices skyrocketed three years ago, says Dan McFeely in the Indianapolis Star. The same thing will happen this time. Indiana, for example, can expect a 1.3 percent rise in unemployment from another dollar-a-gallon jump in gas prices, according to a Ball State University study. So brace yourself, the economy is in for another hit, and it could even "trigger another recession."
"Study: Hike in gas prices likely would slow economic recovery"
This time, $4 gas will hurt less: The last spike in prices sent American drivers into a "collective breakdown," says Rick Newman in U.S. News, but at least it knocked some sense into us. Now, we drive less — Americans log fewer miles than we did in 2007 — and millions of us have downsized from gas-guzzling SUVs to miserly compacts and hybrids. So $4 gas "won't be quite as painful" as it was last time.
"Why $4 gas will cause less pain this time"
The recovery is just going to get slower: The effects of higher gas prices boil down to simple math, says Anthony Clark in the Gainesville, Fla., Guardian. The average household spends an extra $500 a year for every $1 increase in the cost of a gallon of gasoline, and reduces spending on other goods by $250. So a jump from $3 to $4 at the pump will force businesses and consumers to tighten their belts, "slowing an already sluggish economic recovery."
"$4-a-gallon gas: What effect would it have?"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- The 11 worst fast food restaurants in America
- 7 things the world's happiest people do every day
- 7 grammar rules you really should pay attention to
- Why are so many parents being arrested?
- The biggest lesson Obama failed to learn from Bush
- Israel has only two choices: Eliminate the Palestinians or make peace
- 9 things you probably didn't know about the moon
- What I learned from totally unplugging and shutting up for three days
- Why America is duty bound to help Iraqi Christians
- The rise of the global middle class is our best hope to stop climate change
Subscribe to the Week