Will Gas Prices Exceed $5 Per Gallon By Summer?

In some parts of the United States gas prices are already well above $4 per gallon for premium and here in Central Texas the price for plain regular unleaded gas in already at almost $3.50 per gallon. While reading news about the slowing US economy and the inflationary effects of raising gas prices, I began to become more concerned about what the next year has in store for jobs growth both in the US and around the world. There are so many issues that seem to be going against the US economy right now and with both the US stock market and real estate both in the tank, all the wrong things are going up in price while the important stuff like home prices are going down.

In recent weeks I have been keeping a close eye on the price of Gold because in my opinion it is impossible for the US to have a growing economy while at the same time Gold prices are hitting new record highs. It is no surprise to me that with ever rising gas prices and sluggish pricing in the stock and real estate sector that job creation hit an all time low last month. A slowing US economy has the effect of creating an environment where there will be slow new job growth and some business sectors will take even a worse step and start laying off workers as demand for their products dry up.

Of all the things that are current causing a drag on the US economy, nothing is hurting our economy more in the long run than continually high prices of gas and crude oil. One of the first sectors to be hurt by rising fuel prices will be tourism. When gas prices are low, most people enjoy taking long vacations to far away destinations. However, with gas prices approaching $5 per gallon in some regions - vacation travelers will most likely stay close to home because of the amount of money it takes to fill a gas tank at $5 per gallon.

In association with vacation travel, major airlines along with big tourist locations will suffer as well. While most airlines have tried hard to hold the line on ticket prices while jet fuel sours, there will come a point in time where these airlines will be forced to either raise ticket prices or go out of business. Another area of the economy that is hurt by rising gas prices is the domestic automobile business and their mainstay vehicles, the SUV. A friend of mine that owns a Chevrolet Suburban told me the other day that it current costs nearly $75 to fill that vehicle up.

The real solution to Americans energy problems revolve around drilling for more oil here in the United States and pulling back some of the government regulations that cause companies to look elsewhere for Americans fuel needs. I don't want to see the great American wilderness disappear in a field of oil rigs anymore than the next person, but some kind of compromise should be reached between drillers and environmentalist that will be in the best interest of the country.

Read more about the Economy:

Rewarding Bad Business Creates Many Problems
It's The Economy, Stupid All Over Again
Stock Markets Crash As US Recession Fears Increase
Tuesday Could Bring Big Trouble For US Stock Prices
Grim Economy In 2008, Fed Chairman Bernanke

March 09, 2008 Archives