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NEW YORK -- As the price of energy resumes its upward march, the additional expense of gasoline and the looming cost of higher heating bills this winter are hitting ordinary Americans in their pocketbooks, slowing consumer spending on other goods and services, reported the New York Times.
Energy costs first started squeezing households in the spring, when gasoline prices passed $2 per gallon, holding down spending in June. Now, with the recent rise in oil prices beginning to push up fuel costs again, spending growth is flattening out once more.
More expensive energy is also beginning to take a toll on Americans, suggesting that some of that frustration may spill over into the political arena in November. Last month, one in 10 respondents to the University of Michigan's most recent consumer confidence survey said they were concerned about high energy prices, according to Richard Curtin, the director of the survey. This was below the roughly 14 percent who mentioned the issue when gasoline prices first flared up in late spring, but far above the 1 or 2 percent who worried about gas prices in January.
To some extent, Americans are blaming the administration for the rising cost of energy. In June, 24 percent of respondents to a Los Angeles Times nationwide poll said that the Bush administration was largely responsible for the rise in gasoline prices, about the same as the 25 percent who blamed oil-producing nations in the Middle East.
But it is not clear that the rising cost of energy is going to matter all that much to voters on Election Day. To start, oil prices have to vie for attention with a host of other issues preoccupying the electorate. In June, 7 percent of Americans thought the high cost of energy was the most important problem facing the nation, according to a Gallup poll. By September, the proportion had declined to 1 percent.
According to the National Association of Convenience Stores, motorists reacted to rising gas prices mostly by trading down on the octane scale, from premium to regular, and did not do much else.
While extra energy costs have taken a sharp bite out of those with relatively modest incomes, oil's overall economic impact has been muted so far. In an analysis sent to clients earlier this month, economists at J. P. Morgan estimated that expensive oil would shave a percentage point from overall economic activity this year, mostly because of gasoline prices eroding consumer spending. They argued that consumers have already felt most of the hit, so spending should be stronger toward the end of the year.