Here’s How You’ll Know When Gasoline Prices Are Crushing The Recovery

Joe Weisenthal

Over the past several days, we’ve seen several arguments for why surging gasoline prices won’tharm the economy.

They range from:

• We have more domestic production these days.
• Other commodities aren’t surging, so the inflationary effects are more narrow.
• Plummeting Natural gas prices are saving people a ton of heating, offsetting gas.
• Gas prices aren’t surging at a fast enough clip to freak consumers out.

And so on…

On the other hand, there seems to be a good history of gas prices harming the economy, and all of the above counter-arguments have a certain it’s different this time feel to them.

The pseudonymous blogger New Deal Democrat has a great post looking at what he calls the current “duel” between initial claims, which are falling, and gas prices. He notes that the same duel took place in 2011, and that ultimately, gas prices choked off the recovery, preventing it from really gathering momentum.

So how to know that gas prices are winning this time?