Karen Silverman scowls as she starts to fill up her 2007 Jeep Grand Cherokee, the numbers on the dial spinning too fast to follow until the pump clicks off at $62.
“When I got the Jeep, it wouldn’t cost me half that,” she laments. “That’s money I could use for a nice dinner or a movie. Now it just goes to the oil company.”
With much of the country now paying $4 a gallon, and further increases likely, millions of motorists are having to face the same decision as Silverman, a suburban Detroit legal assistant. Prices have risen an average of 80 cents a gallon over the last year, according to the AAA, and they’ve more than doubled since slumping to an average $1.86 a gallon following the mid-2008 fuel scare.
According to various data, Americans are now devoting an average 5% of their income to pay for gasoline, up from a little more than 2% just two years ago.
“The surge in oil prices since the end of last year is already doing significant damage to the economy,” says Mark Zandi, chief economist at Moody’s Analytics.