Why rising oil prices might not faze the US economy

In a significant shift in thinking, several economists contacted by CNBC now believe a rise in US oil prices may not produce very much, if any, drag on U.S. growth. Some even contend that the nation’s new oil-producing prowess make a rise in prices “a wash” for growth.

This is a complete about-face for old metrics where it was practically automatic for economists to mark down growth when oil prices rose.

But the rise of the United States to become the world’s largest second largest oil producer has changed the calculus for how rising energy prices affect the economy. Consumer pain at the pump is now seen as offset to an extent by increases in capital spending by US oil companies and by gains in the growing number of regions producing energy. And what once would have been a massive surge in the oil trade deficit, which would subtract from gross domestic product, is now offset to a large degree by US oil exports…

 

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