Gas is already up 20 cents a gallon since the first of the month where I live. And there's no end in sight.
The cost of living in the U.S. rose in February by the most in 10 months, reflecting a jump in gasoline that failed to spread to other goods and services.
The consumer-price index climbed 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News, after increasing 0.2 percent the prior month, the Labor Department reported today in Washington. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.
The biggest jump in gasoline in more than a year accounted for about 80 percent of the increase in prices last month, leaving households with less money to spend on other goods and services. Federal Reserve policy makers say the advance in fuel costs will be temporary, and most see little risk inflation will flare out of control as unemployment exceeds 8 percent.
"There are some worries from the energy prices perspective, but the Fed and most people realize that the increase will probably be transitory," said Benjamin Reitzes , an economist at BMO Capital Markets in Toronto. "Outside of energy prices, there is not much risk for the consumer."
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor's 500 Index maturing in June rose 0.2 percent to 1,399.3 at 8:31 a.m. in New York. Treasury securities trimmed losses,, with the yield on the benchmark 10- year note at 2.32 percent, down from a high of 2.35 percent in the minutes before the data was released.
"Outside of energy prices?" That economist must not eat very much. Food is going up hand in hand with gas prices, reducing household discretionary spending and making it harder to make ends meet for a lot of us.
The only way that gas prices will go down is if the supply is increased relative to demand. That might happen if the Saudis open the spigot a bit, but they don't mind oil at near $130 bbl as long as the west's economies don't go into recession again.
Gas will probably stay high through the summer and, given the threat of an attack on Iran, might become unmanageable in the fall.