If we use the past to predict the future, then there may be cause for concern as we watch the cost of gasoline continue to climb. The upward movement of gas prices can’t help but remind us of a similar scenario, when early in 2011 the political turmoil in the Middle East caused oil prices to climb, which in turn threw the US economy back into recession mode after showing signs of recovery.
The past few weeks Americans have been nervously watching the price of oil at the pump climb, wondering if this is 2011 redux. Luckily most analysts think not, saying that today’s economy is in a much better position to absorb any blows it might take from rising oil prices.
“This is the dark cloud in an otherwise brightening domestic economic picture. It’s something we need to watch right now, but not panic about yet,” said Jerry Webman, chief economist at OppenheimerFunds in New York.
Since the beginning of 2012 US gas prices have soared by 8.8 percent, says the Energy Information Agency. The average price of gas in the US peaked at $3.65 per gallon last week. That amount is a record high for the season, winter usually being a slower time for demand.
“Fortunately the U.S. economy is on an upswing, not strong but on the way up. It’s in a better shape to deal with the oil prices,” said Sung Won Sohn, an economics professor at California State University Channel Island. “We don’t have the Japanese tsunami to worry about, business and consumer confidence has improved, and the job market is growing nicely.”
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