National average for gasoline price is already approaching $4 gallon, weeks before it typically peaks-around Memorial Day. At $3.91 per gallon (per latest daily survey by AAA) the price is just 20 cents below its record high of $4.11 per gallon in July 2008.
Rising oil prices may not have yet hurt the economic recovery but if they continue to rise, they may pose potentially serious threat to the recovery in the months ahead. One difference this year is that the price rise hasn’t been as dramatic as it was in 2008, when prices jumped 50% in just nine months.
According to the Conference Board, the consumer confidence index for March slipped slightly to 70.2 from an upwardly revised 71.6 for February, (though roughly in-line with the consensus forecasts for 70.3) but remained near post-recession highs. While consumers’ assessment of current conditions continued to improve, the worries about inflation rose to the highest level in a year.
Do you think that gas prices have already started hurting the consumer spending and economic recovery? Or is there a psychological “tipping point” at which the consumers begin to cut their spending?
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