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Study: High Gas Prices, Construction Slowdown Hurting Recovery

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(credit: JEFF PACHOUD/AFP/Getty Images)

(credit: JEFF PACHOUD/AFP/Getty Images)

ORANGE (CBS) — If you’re want to know why the economy seems to be stuck in neutral, a new study says look no further than your local gas station.

KNX 1070’s Ron Kilgore reports a perfect economic storm is brewing that economists warn could hinder job creation in the months to come.

Dr Esmael Adibi, who runs Anderson Center for Economic Research at Chapman University, attributes the bleak outlook to a slowdown in government defense spending, coupled with a drop in exports after the devastating earthquake and tsunami in Japan.

But Adibi insists the number one concern is the rising cost of gasoline that’s already eaten up federal tax breaks.

“All of us workers, we pay 2 percent less in Social Security, but all of that saving, more or less, is gone,” Adibi said. “Increasing gas prices [are] going to impact job growth and economic growth.”

The Inland Empire region including Riverside and San Bernardino remain hardest-hit as construction jobs have failed to rebound amid a recent slump in the residential housing market.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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