Before we get too carried away, let me give some context:
On Thursday morning, New Jersey Governor Chris Christie was on MSNBC’s Morning Joe to talk about the presidential election, when he brought up the issue of rising gas prices and how it would play as the primary season heats up. Christie’s argument was that if gas hits $6 a gallon, it would have a huge effect on the general election because gas prices affect consumers and businesses at all levels.
Granted, one can never be sure about the validity of a statement that’s political in nature. But, adding credibility to the fear of rising gas prices, a AAA spokesperson recently told the Los Angeles Times isolated parts of the country could be seeing $5-a-gallon gas “by April or May.”
Today, the Reuters/University of Michigan consumer sentiment index for February was just barely higher than the previous month – making it the slowest consumer confidence increase in months. IHS Global Insight economists contributed the minimal gains to rising gas prices:
“Americans are going to feel pain at the pump, since given the current state of affairs it is relatively safe to say that gasoline prices will surpass $4/gallon by Memorial Day. The recent news on the jobs front is cause for some hope that the future will look brighter, but as gasoline prices rise consumer confidence takes a beating,” said IHS economist Chris Christopher in an email.
While several gas stations here in Westchester already feature $4/gallon gas, for the national average to top that bar before Memorial Day weekend would be a significant blow to the economy. Currently, the national average for a gallon of unleaded gas is $3.647 – good for a 13 percent increase compared to exactly a year ago. In New York, the statewide average is even higher, at $3.910/gallon. That’s nearly 6 percent higher than just a month ago and 13.5 percent higher than a year ago.