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EconoMeter: Will rising oil prices derail recovery?


Sunday, February 27, 2011

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Kelly Cunningham, National University System
Answer: Yes
With current growth fragile and tenuous, any significant incident such as escalating gas prices could disrupt economic momentum. A short-lived crisis may not be too disruptive, but if oil prices spike and stay high for a long period, there will be severe impacts on a still recovering U.S. economy. San Diego and Southern California’s auto driven and visitor dependent economy could be more affected than many areas. Consumer spending in San Diego was severely curtailed the past few years. Redirecting spending to absorb higher gas prices would be highly disruptive for local businesses and consumers only beginning to improve.