Industries like airlines and trucking, which are most severely affected by fuel prices, have passed on their higher costs almost immediately instead of waiting for the price increases to hammer profits.
And much of the rest of the United States economy is far less dependent on oil than it used to be. Oil consumption has dropped more than 5 percent since 2005, while natural gas use has risen 10 percent. A glut of domestic natural gas has kept prices low, providing a lift to industries like chemicals and pharmaceuticals and tempering the price of electricity, much of which is generated from natural gas.
Still, higher oil and gas prices matter. Daniel Yergin, the oil historian, said the recent increase “forces people into really difficult choices.” He said, “It becomes a thermometer, a register of fear and anxiety.”
Nouriel Roubini, the New York University economist who became known for his pessimistic forecasts before the financial crisis, told reporters in Dubai on Tuesday that an increase in oil prices to $140 a barrel could even cause some advanced economies to dip back into recession.
The rising price of gas — which averaged $3.57 a gallon nationwide on Monday, according to the government — is already prompting some people to change their habits.
Ronnie Undeberg, 50, of Summerfield, Fla., started driving less in December, when gas hit $3 a gallon. “I started planning my errands,” he said. If gas reaches $4, Mr. Undeberg, a discipline clerk at Lake Weir Middle School, said he would scale back his cable television package and cut his cellphone use.
Higher fuel costs reduce consumers’ discretionary income, which is often spent on such niceties as dining out or the latest electronic devices. Low- and middle-income families are typically hurt most by a higher price for energy because they spend a higher portion of their household budget on gas and heating bills. |
