Rising oil prices are threatening recovery in the job market, the Financial Times reports. The University of Michigan's index of consumer confidence fell to a six-month low in March on fears that inflation rates will rise on the coattails of higher prices at the pump.
Less confidence in the economy means less spending, and less spending means less job creation.
"All the good news in the labor market has been wiped out by rising oil prices," says David Semmens, an economist at Standard Chartered in New York.
|President Barack Obama
Outside of the United States, fears are also building that rising oil prices, European debt concerns and now an earthquake in Japan will all damage a fragile global economy.
Even the winners, mainly oil producers, cannot spend enough of their petrodollars on imports from the rest of the world to offset the negative effects from pricier crude.
"A big increase in oil prices is, thus, likely to dampen global demand," Stephen King, HSBC chief economist, writes a recent report.
Back home in the United States, the Obama administration is worried that higher oil prices will offset the effects of recent tax cuts.
“"[Gas] prices are hurting individuals right now and obviously taking some of that tax cut that we gave them and forcing them to use it on gas as opposed to buying other items," says President Barack Obama, according to The Washington Post.
Some in President Barack Obama's own political party want the government to open the Strategic Petroleum Reserve, a stockpile of 727 million barrels of crude oil available for emergencies.
Obama, opposed to the idea in the past, now says he'll remain open to the idea.
"If we see significant disruptions or shifts in the market that are so disconcerting to people that we think a Strategic Petroleum Reserve release might be appropriate, then we’ll take that step," Obama says.
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