Washington – Rising energy costs are nagging businesses and increasing their desire to pass them along to customers, although competitive forces are blunting their ability to do so, a Federal Reserve survey suggested Wednesday.
The survey, conducted before oil prices zoomed to a record high of $75.17 a barrel last week, said the economy was growing solidly in the spring even as companies and consumers fretted about high energy prices.
“High energy prices were at the forefront of most districts’ mention of costs pressures,” the Fed survey said. “Many districts describe firms as attempting to raise selling prices but having mixed success, with price increases generally either smaller than the cost increases or less widespread.”
The Fed’s snapshot of economic conditions around the country is based on information supplied by the 12 regional Federal Reserve banks, collected before April 17.
Some companies haven’t been able to pass on to customers all of their higher costs for energy and other raw materials, the Fed survey said.
Some regions, including Cleveland; Richmond, Va., and Dallas, cited high energy prices as the culprit behind weaker-than-expected tourism, auto sales or retail sales – especially involving lower-income consumers, the survey said.
It said this had the effect of “constraining consumers’ driving and, indirectly, reducing the income available for purchases after paying for home fuel and transportation fuel.”
Oil prices have moved off last week’s record high and are now hovering below $72 a barrel – still more expensive than a year ago.
$71.93: Price per barrel of crude oil, down 4.3 percent from a record-high $75.17 on Friday
$2.84: Average retail price for a gallon of regular unleaded gasoline in Colorado, up from $2.49 a month ago
$2.92: Average retail price nationally for a gallon of regular unleaded, up from $2.50 a month ago
