However, economists are wary about a potential hit to GDP if gas prices rise too quickly. For instance, the $1.26 per gallon increase from September 2010 through May 2011 diminished GDP growth to 0.4% in the first quarter and 1.3% in the second, reports Tim Mullaney for USA Today.
John Lonski, chief capital markets economist at Moody’s Analytics, cautions that if gas goes above $4 and holds, or if Iran closes the Strait of Hormuz, consumers will feel the pain. IHS U.S. chief economist Nigel Gault calculates that for every $10 increase in crude translates to 24 cents a gallon on gas and a 0.2% drop in GDP.
SPDR S&P Retail ETF
For more information on the retail sector, visit our retail category.
Max Chen contributed to this article.