Economists said consumers should brace for a worse performance in November, given an even-bigger increase in gasoline prices so far this month.It really should be no surprise that near $100/b crude oil prices are putting a major dent into the American and worldwide economy. The American economic engine is driven largely by consumers' ability to purchase goods and services. And there is a price to be paid for these high oil costs.
"There are no alarm bells going off today, but neither does [the report] provide any wiggle room to cut rates," said Julia Coronado, a senior economist at Barclays Capital, of New York. She said Fed policymakers "have to take the inflation threat seriously."
Economists are concerned that rising energy prices will leave consumers with less money to spend on other items and will depress their spending, which accounts for two-thirds of economic activity. That would add to the list of problems already facing a slowing economy.Maybe we should take comfort in knowing that our American dollars are going to work for others.
"Consumers are getting squeezed between falling house prices, rising mortgage payments, and now rising oil prices," said David Wyss, chief economist at Standard & Poor's in New York.
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The malls are full, the cars are fast, the fashions are sharp -- conspicuous consumption is king as Saudis enjoy the benefits of oil at almost $100 a barrel.
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In two weeks, Venezuela could be starting an extraordinary experiment in centralized socialism fueled by oil. By law, the workday would be cut to six hours. Street vendors, housewives and maids would have state-mandated pensions. And President Hugo Chávez would have significantly enhanced powers and be eligible for re-election for the rest of his life.
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- Former CIA Director Warns Foreign Oil is a Threat
- Big Oil's War on Ethanol
- Americans Want Renewable Fuels Now!
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