The average price of gasoline in the U.S. hit $4 a gallon for the first time Sunday, the latest milestone in a run-up in fuel prices that is sapping consumer confidence and threatening to nudge the nation into recession.
The record nationwide average for regular-gasoline prices, announced by auto club AAA, follows Friday’s near-$11 surge in oil prices to a record $138.54 a barrel. Both are part of what, by some measures, is the worst energy-price shock Americans have faced for a generation, in terms of its toll on their pocketbooks.
In recent days, soaring fuel prices and disappointing employment data have reignited fears that the nation’s economy — which has taken a pounding over the past year from a housing downturn, credit crunch and weakening job market — will slip into recession, or pull back further if a recession is already under way. Rising fuel prices are straining household budgets, damping the spending that drives more than two-thirds of the nation’s economic activity.
“What we’re seeing here is a lot of additional pressure on a consumer sector that was soft to begin with,” said Alliance Bernstein economist Joseph Carson. “Is it a tipping point by itself? It’s close.”
Read it all from the front page of this morning’s Wall Street Journal.
Ouch, but it still didn’t stop me from making my usual longish drive to attend a faithful church Sunday.
APB
I have looked into my crystal ball and I see $5.00 by Summer’s end and $7.00 by year’s end. It may hit $10.00 by next Summer. The one thing that I do not see going-up is our income. I’ve been an NSM (non-stipendiary minister) for thirteen of my seventeen years in ministry. So my advice to all of you who stand to lose your churches and full-time positions is get you teeth checked while you can and save your pennies; learn to live within your means and cut your cloth according to your measure. Those are the wisest cliches that I can offer. Cheer-up saints it’s going to get worse!
I just paid $4.089 and that was cheap for eastern West Virginia!
It’s $4.49 here (though I found it yesterday for $4.37). The talk is it will hit $5 by the Fourth of July. I have difficulty believing that, only because I suspect it may be sooner (end of the summer? Try end of the week). It’s rising between 3 and 5 cents a day. What surprises me most is that many of the economists I’ve been reading are saying this is fine, that it somehow won’t ripple out into the economy in the form of higher shipping prices, higher grocery prices, and lower consumer spending. The only consequence they seem to be noting is the effect on the airlines (so count tourism and business travel as more hits). I am clearly no economist, but I can’t help but see this plunging us further into recession (if that’s what we’re really in…see first clause of this sentence).
I spoke with a friend in Nova Scotia and given the exchange rate and the conversion from litres to U.S. gallons, he is paying over $7.00 per gallon for regular! Metal prices have gone up tremendously, as have other building materials. I would have liked to have know what Ludvig Von Mises or some of the other Vienna School people would read into current trends. Makes one think of the lyric from the old song “somethings gotta give, somethings gotta give, somethings gotta give”, or does it?
Regular unleaded is about $4.50 in Merced CA. It cost me $50.00 to fill up my TOYOTA COROLLA last week! I would be mildly shocked if it was not over $5 per gallon by the end of the month. I am walking or riding my bike as much as possible these days.
ICXC
John
$3.99 here at most stations yesterday. Costco and Sam’s still swinging between $3.82 and $3.85. Gotta love the price wars!