New York, March 1 (FinanceEnquiry.com) - Gas price has risen 45 cents since January 1 and is at an all-time high for this time of the year, an average of $3.73 per gallon. The question that is tormenting everyone is whether the surging gas price will destabilize the economy.
However, economists argue that the situation this year is much better than early last year when a similar jump in prices stifled the economic growth and household budgets. As such, they say that the situation, so far, does not warrant any fears for economic derailment. They say that the economy is improving and as such even with the rise in gas price, other spending will not be restricted. However, if the gas price goes beyond its record of $4.11 a gallon, the situation would be worrisome.
Economists are of the opinion that with the rise in price of gas witnessed so far, the economy can easily withstand the impact. The reasons being put forward by them include improving job situation, lowering of unemployment claims, an improving economy as the Dow has crossed 13,000 and the housing market is steadier than before, and consumer confidence reaching the highest level in a year. Economists believe that if the gas price reaches $4 a gallon, the consumers will feel the pinch, though they will still keep spending.
However, economists argue that the situation this year is much better than early last year when a similar jump in prices stifled the economic growth and household budgets. As such, they say that the situation, so far, does not warrant any fears for economic derailment. They say that the economy is improving and as such even with the rise in gas price, other spending will not be restricted. However, if the gas price goes beyond its record of $4.11 a gallon, the situation would be worrisome.
Economists are of the opinion that with the rise in price of gas witnessed so far, the economy can easily withstand the impact. The reasons being put forward by them include improving job situation, lowering of unemployment claims, an improving economy as the Dow has crossed 13,000 and the housing market is steadier than before, and consumer confidence reaching the highest level in a year. Economists believe that if the gas price reaches $4 a gallon, the consumers will feel the pinch, though they will still keep spending.
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