Photo: Matt Rosoff
Higher gas prices are fueling pessimism about the future of the US economy, a new poll shows. CNBC reports: The survey of 800 Americans, from across the nation, income groups and ages, finds the percentage of Americans who believe the economy will get worse in the next year spiking to 37 per cent, a 15 point gain from December. It’s now just five points below the all-time high in the series of 43 per cent in June 2008, which came in the midst of a surge in gasoline prices.
Americans see inflation as widespread and are cutting back on non-essentials to make ends meet. On average, respondents see prices rising 6.6 per cent over the next 12 months, up from 3 per cent in December and the second highest median gain in the survey’s four-year history. Three-quarters of Americans says they have seen food prices rise over the past six months, and 61 per cent believe the increases will last longer than a year. A similar percentage believes that higher gas prices are here to stay.
Higher gas prices are almost always a precursor to upheaval in American politics. The oil shock of 1973 (combined with Watergate) led to a Democratic landslide in the Congressional elections of 1974. The second oil shock of 1979 led to the Reagan/Republican landslide of 1980. Falling oil prices, generally speaking, reward incumbents.
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