"Consumers will have a little less to spend," he says. "And rising energy prices, which are a big part of the CPI, could push inflation from 1.6 percent to perhaps 1.8." But that's still pretty low. The ongoing Asian recovery is good news for U.S. trade, and of course every extra nickel at the pump pulls another Texas oilman above the poverty line.
The era of dirt-cheap oil seems to be drawing to a close. A survey of 10,000 gas stations nationwide reveals that fuel prices have risen an average of eight and a half cents per gallon in the past two weeks alone. That'll put a dent in commuters' wallets, but will it derail the so far unstoppable U.S. economic boom? TIME senior economics reporter Bernard Baumohl says that to be sure, the U.S. economy's stellar performance last year was "dependent to a large extent on the sharp drop in oil prices" -- pennies saved at the pump have a way of going straight into consumers' shopping sprees, and last year's savings totaled an estimated $35 billion. But even with a planned production cut by OPEC countries due in April and increased demand from the recovering Asian economies, Baumohl doesn't expect crude oil prices to get any higher than $14 to $16 a barrel in 1999 -- and that's still pretty darn cheap.