Most of the press coverage about gasoline prices points to the rise of the national average for a gallon of regular. The price has been rising rapidly — a cause for concern. The cost for that gallon is currently $3.702, up from $3.396 a month ago. What is rarely mentioned is that the gas price for Americans who live in just a few states is above $3.90. And those states are the home to nearly a third of the people in the country. So a large number of drivers in the United States may have to pay a price of $4 soon, if gas continues to rise at current rates for a few more weeks.
The price for a gallon of regular is $4.095 in California, $4.056 in Illinois, $3.983 in Michigan, $3.906 in New York, $3.961 in Connecticut and $3.908 in Wisconsin, according to the AAA Fuel Gauge.
Economists were deeply concerned earlier this year when they believed that the price for a regular gallon of gas might reach $4. And it nearly did in April, which may have helped to derail the recovery that began late last year. No one knows for sure, but the burden put on consumers and businesses that operate cars, trucks and planes could not have been positive.
The new rise in gas prices and the very high level of the price in some of the country’s largest states is more of a concern now than in April. GDP growth in America is already less than 2%, based on figures for the second quarter. That number could slide in the next two quarters because of a general slowdown of consumer spending and the low number of jobs added to the economy. Fear of the so-called fiscal cliff probably has started to lower expectations among all tax payers, both people and business, that they will have more money to spend next year than they did this. As a matter of fact, taxes may well be higher in 2013, and improved productivity and business anxiety likely will keep base wages no better than they were at the start of the last recession.
If there was a time when gas prices could badly hurt the economy, it is now.
Douglas A. McIntyre
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