Gas prices are always changing, altering the way we dish out dollars at the pump. You might be changing your spending habits in other areas, too, however. Obviously, knowing where the economy is going is important, but what about spending areas impacted by oil prices?
Consumers are a shrewd bunch. Together, they move the economy’s pieces around when they’re not spending as much filling up. Below, we cover five of the “hidden” impacts faced by rising gas prices—one wallet pinch at a time.
1. Changing Medicine Prices
Remember: Petroleum practically runs our economy. If oil prices are shifting, expect a shift in petroleum-containing medical products, too. Artificial limbs, heart valves, syringes, stethoscopes, anesthetics, vaporizers, antiseptics and even operating gloves are derived from petroleum, as are deodorants, cough syrup, vitamins and bandages. If your gas prices are increasing, stock up on toiletries soon. Oil prices might tick up those numbers, next.
2. Increased Unemployment
If the economy is already suffering from unemployment and high inflation, rising oil prices can cause severe damage by tying up economic policy options. In general, higher gas prices are indicative—or will soon become indicative—of a slightly higher unemployment rate. That’s right, you can browse the job market’s health by viewing your local Chevron’s big, bold prices.
3. Increased Food Prices
Food, too, is tied closely to the oil industry. While farming sectors can actually benefit from increasing oil costs, many food industries suffer. Energy is an agricultural staple, and heightening energy costs directly impact the prices of food sold. Providers need to cover their expenses, of course, and if they can’t save on oil they’ll save where the slack ends up—on the consumer’s debit card.
4. Lower Consumer Confidence
Not necessarily your confidence, but consumer confidence, in general, is lower when gas prices are higher. In short, buyers have less money to toss around, so they’re less likely to spend discretionary income. Consumer confidence is subtle, but it matters a lot when a surrounding economy tries pinning down demand.
5. Increased Import Vehicles Prices
When oil prices rise, import purchases do, too. Back in 2008, domestic automakers didn’t have many fuel-efficient models to send into the fray. Honda and Toyota, meanwhile, prospered due to their fabulous fuel economies. When domestic automakers can’t cut it with fuel-efficient options, foreign automakers take over. If oil prices are rising, don’t be surprised to find shifting vehicle prices, too.
Next time you notice an increase at the pump, you now know where to be a more conscious consumer.