WASHINGTON — Just when companies have finally stepped up hiring, rising oil prices are threatening to halt the U.S. economy’s gains.
Some economists are scaling back their estimates for growth this year, in part because flat wages have left households struggling to pay higher gasoline prices.
Oil has topped $108 a barrel, the highest price since 2008. Regular unleaded gasoline now goes for an average of $3.69 a gallon, according to AAA’s daily fuel-gauge survey, up 86 cents from a year ago.
The higher costs have been driven by unrest in Libya and other oil-producing Middle East countries, along with rising energy demand from a strengthening U.S. economy.
Airlines, shipping companies and other U.S. businesses have been squeezed. The rising prices are further straining an economy struggling with high unemployment and a depressed housing market.
“The surge in oil prices since the end of last year is already doing significant damage to the economy,” said Mark Zandi, chief economist at Moody’s Analytics.
The watchful eye on consumer prices takes place in the shadow of a looming government shutdown as congressional Democrats and Republicans struggle to reach agreement on how to finance the government for the remainder of the 2011 fiscal year.
Pitching the promise of energy independence in Pennsylvania, President Barack Obama cautioned that it’s going to be tough to transition from America’s oil-dependent economy and acknowledged there’s little he can do to lower gasoline prices in the short term.
Unlike other kinds of consumer spending, gasoline purchases provide less benefit for the U.S. economy. About half the revenue flows to oil-exporting countries such as Saudi Arabia and Canada.
