Sunday, February 27, 2011
Rising Oil Prices Pose New Threat to U.S. Economy
It seems like the U.S. economy just can’t ‘catch a break’. Consumer confidence is rising which is helping our economy grow, but there has been a significant recent rise in oil prices as well. If this rise in oil prices stays consistent, it will most likely slow down the growth rate of our economy that is already moving pretty slow. This slow growth rate is already struggling to produce jobs in this country. Now with increasing oil prices, this imposes another problem on our economy and growth will not be as great. There is a strong element of fear in consumers of what’s next, and what’s next after next. Budget and debt problems at all levels of American government also threaten to disrupt the domestic recovery. The irony to all of this is that the American economy just barely got up off the ground from the devastating financial crisis and now are being hit with rising oil prices. Higher oil prices restrain growth because they result in higher fuel prices for consumers and businesses.
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2 comments:
The rising oil price will sure have an impact on the U.S economy as well as other parts of the world. As the oil price rising, gas price will response as well. As a reslut, transportation cost will increase, and almost all the goods and services will increase the prices. In this case, consumer confidence will be hurt, and U.S recovery will be even harder.
Although oil prices and ultimately gas prices will rise the U.S. consumers and economy have shown that they are willing to pay extra money to keep their automobiles. For that reason I don't feel like consumer confidence will be too effected by a rise in oil prices. It could effect the rest of the economy but in my opinion it shouldn't do too much to consumer confidence as a whole.
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