Summary
Remember the worries over what $2 a gallon gasoline would do to the economy? Now that gas prices at the pump top $3 a gallon in many areas and some estimates say they could go to $4, it's not a matter of if the economic fallout will come but when.
This could play out in two ways in the months ahead. The first, most likely scenario is that the "oil shock" in the wake of Hurricane Katrina causes consumers to ratchet down spending on other goods and services at least for the short run.See the full content of this document
Extract
All Business: Nation Waits for Katrina to Hit Wallets
A more troubling second scenario, however, is that Americans may adjust spending downward if they feel that higher gas prices are here to stay. Couple that with growing inflationary pressures as companies try to pass on their increa...
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