Will high gas prices slow economic recovery?
Sat, 05 Mar 2011 00:01:06 GMT —
COLUMBIA (WACH) -- The average price of gas in Columbia is up almost 80 cents per gallon from where it was a year ago.
When will it stop? Nobody really knows, but a recent report finds nine in 10 consumers anticipate even higher fuel costs.
I will probably try to carpool more and drive a little bit less, says Columbia Resident Christina Robins, but I don't think my plans will change.
There are concerns that gas prices could drive the nation into another recession.
It is often not so much the level of the prices, but just how quickly we get there, says USC Economics professor John McDermott.
McDermott believes the increase will only slow the recovering economy.
I kind of expected it, adds Columbia resident Christopher Almeida. It has been fluctuating quite a bit.
Last week, the national average for regular jumped up 19 cents to $3.34 a gallon, according to the Energy Information Administration. It is the steepest one-week rise since Hurricane Katrina disrupted oil production in the Gulf of Mexico in 2005.
Experts blame instability in the Middle East and North Africa for the most recent spike in gas prices.
McDermott says the long-term rise in costs is likely due to additional demand from emerging countries, such as China, India and Brazil.
Even though consumers may be feeling the pinch when pumping, McDermott adds no pain, no gain.
It is only when oil prices rise when we truly have incentives to look for alternative fuel sources.
Spending more on gas means spending less elsewhere, and its predicted fuel could hit the $4 mark by summer.