Gas Prices Threaten Recovery

By Bill Hudson, WCCO-TV

St. PAUL, Minn. (WCCO) — Lunchtime at La Cucaracha Mexican restaurant in St. Paul is busy. Likewise, in many other St. Paul restaurants, more folks are dining out more often.

Also on Selby Avenue, hair stylists at the FiveTwoSix Salon are seeing their customers more frequently. A few doors away at Golden Thyme Coffee, they’re feeling what’s known as the “latte effect.”

From a purely consumer standpoint, the state’s economy is on the mend.

Donna Miller is among the consumers feeling more confident.

“I come here for coffee, lunch, breakfast meetings. I get my hair cut two doors down and my clothes tailored next door,” Miller said.

Miller is typical of what many of us are feeling when it comes to the economy. She is ready to loosen her purse strings when there is something that she wants or needs. It’s called “discretionary spending,” and it’s a big part of the economic recovery.

The bad news, however, is that a rapid jump in gas prices is threatening to kill the party.

“Every time you spend more at the pump, there’s less to spend on everything else,” said Dr. Agapitos Papagapitos, chairman of the economics department at the University of St. Thomas.

Papagapitos said that if oil climbs to the record levels seen in the summer of 2008, when crude oil hit $140 a barrel, forcing consumers to spend $4 a gallon for gasoline, the recovery will face a major threat.

Coffee shops, hair salons and restaurants won’t be the only places feeling the pinch.

“This recovery has been anemic and not robust. And anything that can set it back could be a problem for the economy,” Papagapitos said.

More from Bill Hudson
Comments

One Comment

  1. Frank Peterson says:

    it took this long for anyone to realize that gas prices any where near $3 a gallon is a really bad thing for all of us………… nothing good will come from this….period
    why hasn’t our worthless president and even worse congress done anything to
    help the problem??????

  2. Elmo says:

    Guess we have to wait for a new president? This one wants to run the Country on Wind and Solar. Oh and of course sell carbon credits. So how can I ride the bus on Carbon Credits?

  3. Gary says:

    This CAN’t be true. Obummer said there would be “no” cost of living increase’s.

    1. Phid says:

      Obama said a lot of things. So did his followers, Remember during the 2008 campaign when that lady said something like “I won’t have to worry about paying for my mortgage or paying for gas for my car”?

  4. VERN says:

    $5.00 A GAL GAS! YOU CAN KISS THE AMERICAN ECONOMY GOODBYE
    WHY DON’T OUR LEADERS DIG THIER HEADS OUT OF THEIR OKOLES.
    THE BEST THING FOR OUR ECONOMY IS GAS AT $1.75 TO $2.00
    THEN WATCH OUR ECONOMY RECOVER
    NEW JOBS SIMPLE AS THAT! DAH!
    AMERICAN GREED IS DESTROYING OUR COUNTRY

  5. Veronica Lund says:

    As anyone who has worked their whole life and are now on Social security can tell you…gas prices and food prices are not considered when it comes to “cost of living”.

Leave a Reply

Please log in using one of these methods to post your comment:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From WCCO | CBS Minnesota

Trees Of Hope
Good Question

Listen Live