banner
Business

Economist: High gas prices might dampen economic outlook

Posted April 13, 2011
Updated April 14, 2011

Map Marker  Find News Near Me

— High gas prices, which are steadily climbing toward $4 a gallon in the Triangle, might dampen projections that the economy was making a comeback, according to a North Carolina State University economist.

"We're still expecting the economy to grow and to add jobs, just not as strong as we thought it would before gas prices went up," said N.C. State professor and economist Mike Walden.

He said experts expected the economy to grow at a rate of 3 percent over the next year and create 1 million jobs. But experts are downscaling those figures now that gas prices are soaring, Walden said. He predicts the economy will grow 2.5 percent and add 600,000 jobs.

The U.S. lost about 8 million jobs over the course of the recession, and has gained about 1.5 million back so far, Walden said.

In January, Walden said rising gas prices were a "good sign" that reflecting the global economy was rebounding from the recession. He said Wednesday, however, that continued increases in energy costs cut down on consumer spending, which hurts businesses in the U.S.

"The problem when gas prices rise – other than it hurting our wallet – is that all that money goes out of the country," Walden said. "That leaves us as a country with less money to spend."

Economist: High gas prices might dampen economic outlook Economist: High gas prices might dampen economic outlook

He said economists are worried that a decrease in consumer spending could potentially "harm the economic recovery we're in."

Triangle drivers are reporting that they're cutting back on gas in any way they can.

Kristin Graham lives in Raleigh, but commutes to Fayetteville for work. 

"I'm feeling the gas prices for sure," she said.

But she's rearranged her schedule to cut down on her fuel usage, and it's paying off.

"I've actually gone from an 8-hour day to a 10-hour day so I can work four days a week," Graham said. "Every month, that's going to save me about $50."

Similarly, Raleigh resident Ed Johnston's long-distance marriage has put strain on his wallet.

"My wife lives in Charlotte and every weekend I drive back," he said. "Right now, it's killing us. We're going to have to go to every other weekend because gas prices are so bad."

Economists say that when gas prices go up, most people cut back on shopping and dining out, but restaurant managers at Hibernian Pub and 518 West Italian Cafe on Glenwood South in downtown Raleigh say they're seeing the opposite trend.

"In the past, when weekends came up, people would generally stop by for lunch on their way out of town to the beach," said Hibernian bartender Jim O'Neill. "But now I see people that usually go to the beach on weekends are here for the weekends."

80 Comments

This story is closed for comments.

Oldest First
View all
  • imnotsayinimjustsayin Apr 14, 2011

    How much did this economist get paid to state the obvious?

  • 6079 SMITH W Apr 14, 2011

    Ya know, Goalieman, you might be on to somethin' there.......YABBA DABBA DOO! ;)

  • smegma Apr 14, 2011

    distraction distraction distraction

  • Goalieman Apr 14, 2011

    "What we need is alternate energy sources that are viable. Right now, there are very few, such as nuclear energy." - danimalfurry

    There is always the Flintstone mobile! :)

  • smegma Apr 14, 2011

    redundant redundant redundant

  • mustainemad Apr 14, 2011

    Ya think?????

  • Gatsby Apr 14, 2011

    Reverse Walden...Reminds me of the Seinfield episode when George realized every instinct he ever had was opposite of what he should do...

    Try it Mike...You'll look like a genius in 6 months :)

  • G-man Apr 14, 2011

    Wouldn't be a problem except for we have a nut keeping us from going and getting the oil.

  • tayled Apr 14, 2011

    Wasn't Mike Walden touting the benefits of high gas prices not long ago? I guess he had a change of mind on that one. About time he got with the rest of us!

  • Rebelyell55 Apr 14, 2011

    Dang it , where my anti-gravity vehicle?

More...