Charts and graphs aren't really my thing, but this one is instructive:
July 14, 2008
How Rising Gas Prices Hurt American Households
by Karen Campbell
Backgrounder #2162
The upward march of retail gasoline prices has affected U.S. households regardless of whether their members drive, take public transportation, or walk. In a modern economy, the interdependency created by supplying specialized labor and trading for all other goods and services produced by other people leaves virtually no one unaffected by the price of gas at the pump.
Analysts at The Heritage Foundation recently examined how going from $3 and $4 retail to $5 and $6 retail per gallon of gasoline would affect the U.S. economy. If prices continue to rise at an accelerated pace over the course of a year:[1]
Total employment would decrease by 586,000 jobs,
Disposable personal income would decrease by $532 billion,
Personal consumption expenditure would decrease by $400 billion, and
Personal savings would be spent to help pay the cost.
What the Numbers Mean
Table 1 shows what these numbers mean for three representative households' income, consumption, and saving patterns. The first column is the actual data from the 2006 Bureau of Labor Statistics Consumer Expenditure Survey.[2] The simulated impact is in the second column for each type of household, and the third column shows the dollar loss for households.
The estimate is a best case in that mortgage and interest payments remain constant. More likely, increased borrowing and less saving will result in higher interest payments, constraining spending and decreasing the savings of households yet more. It also does not show the increased likelihood that a member of the household will be unemployed.
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