Lofty oil could lead to more-resilient economy

WASHINGTON (Reuters) – The wrenching adjustments U.S. consumers and businesses have begun to make to cope with sky-high energy costs mark the start of a painful process that should lead to a more energy-efficient, resilient economy.

The relentless oil-price surge has pushed the cost of gasoline to record heights as well. Over the past year, U.S. gasoline prices have risen more than $1 a gallon to above $4 a gallon.

For consumers, every penny increase at the pump translates into $1 billion in spending. So far, consumers have spent about $80 billion more for gasoline this year alone.

These soaring costs have brought back the specter of 1970s-style stagflation. But analysts say things are not as dire now because the economy is more energy efficient than it was 30 years ago. While oil accounted for about 7 percent of U.S. gross domestic product in the 1970s, it accounts for only about 3 percent today.

Reuters