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Rising oil prices raise concerns about Covid-19 economic recovery. Should they?

August 12, 2021

Yahoo Finance:

President Joe Biden has lately sought to soothe fears that rising inflation could hurt the U.S. recovery and undermine his $4-trillion spending plans. This comes after U.S. inflation for the month of June accelerated to the fastest clip since 2008, as the economy continues to recover following the Covid-19 related lockdowns. According to the Labor Department, the consumer price index (CPI) climbed 5.4% Y/Y in the month of June. That’s about twice the average rate over the past decade.

Biden has something else to worry about: Rising oil prices.

The administration will feel a little jittery about high oil and gasoline prices because of the risk they pose to Democrats’ future political ambitions. It’s a well-known fact that gas prices have an outsized impact on the consumer psyche. Gas prices currently sit at $3.18 per gallon nationally, a full dollar higher than prices last year.

Indeed, this is not lost on Republicans, who have seized the moment and blame Biden for rising gas prices.

[Alex Kimani]

More: The oil & gas inflation trap that no one wants to talk about

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