While employers are currently hiring, it looks as though that won’t change—Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd predicted that the US economy is strong enough to endure the recent increase in gasoline prices.
True the unemployment rate in January 2012 was the lowest it has been in three years; however that doesn’t mean we’re out of the woods yet—tensions with Iran pose the greatest risk to the recovery of not only the US but the global economy. With 20% of the world’s oil passing through the Strait of Hormuz and Iran’s threat to close it, the cost of oil is on the rise.
In fact, the cost of gasoline is currently at their highest levels for this time of year and is predicted to reach $5 per gallon in some places by Memorial Day. This cost will hit consumers hard—but at least it is easier to stomach the price hike when you have a job that you might not have had when this happened last year (How The Situation in The Middle East May Affect Pay Checks).
While it is predicted that job growth won’t slow, that doesn’t mean that consumer spending won’t slump, but on the brightside because gas prices have hit $4.00 per gallon before—we’re used to it. But if it goes much higher than $4.50 that could be troublesome for the economic recovery and thus job growth.
So let’s all keep our fingers crossed that job growth continues and the price of fuel doesn’t jump passed $4.50—if it does that’s a whole other story.