Unemployment Drops, Gas Prices Head Higher
As the U.S. economy recovers and adds more jobs, Americans are paying the price at the gas pump.
According to an Associated Press report, the government said Friday (Jan. 6) that the nation’s unemployment rate dropped to 8.5%, the same day that gasoline prices hit an average of $3.35 a gallon, the highest ever for this time of year.
Gasoline prices are rising again after falling in the last months of 2011. Motorists are buying less gas than they did a year ago, but pump prices are rising with higher oil prices.
“It’s difficult to raise prices when gasoline demand is so anemic,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. But if the cost of oil goes up, “you have to pass it along” to the consumer, he said.
Kloza expects pump prices will average between $3.75 and $4.25 a gallon this year. They could be around $4 a gallon by spring.
Oil prices at the start of 2012 continued the climb they started last year. The price of benchmark U.S. crude rose 19% in 2011 to an average of about $95 a barrel. The price of benchmark crude rose 3% this week, though it fell slightly on Friday.