Study: High Gas Prices, Construction Slowdown Hurting Recovery

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 This material may not be published, broadcast, rewritten, or redistributed.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.)

  • TT

    when gas went down – it was like i got a raise – now that they are up again – that money is eaten up in my gastank

  • Robert S.

    It is all contrived! The government wants the economey to “tank”, so they can “build it up” in the future. They also want to see all the big cars off the road! To prove this theory, just look at all the new small “matchbox” cars on the road! Forced recession to make the consumer do what they don’t want to do, and that is buy an way overpriced small car! Obama wants “matchbox” cars on the road, and a downsizing of imported oil will prove that! Bye Bye big cars, Hello “matchbox!

    • nk287

      And what is the problem with not having big cars on the road?

      • Everyday Guy

        nk287, some of us like big cars. Don’t be so narrow-minded.

  • Chris

    You all have no idea the chain reaction this is going to cause… one sees it yet but in the long run…recovery will be strained to the max.

  • Regg

    You needed to conduct a study to figure this out???

  • Astonished

    Did they really have to pay someone to conduct a study of the obvious! Come on! Even a person with only one working brain cell can figure this out sans the study!

    Now that you, the government, are aware of the obvious, what are you going to do about it!

  • What the F..K

    “REALLY” they needed to do a study to figure this out!!!!!

  • Average Joe

    Stop giving aid to Pakistan and use that money to kick start the economy..a billion dollars devided up to the major gas companys but only if they lower gas prices and keep them lowered…or Divide the money and give to LEGAL USA free..

  • Ray

    Two % not going to Social Security why is that good all this does is hurt the program it dose nothing for the people stop all the tax and spend and all the stupid reg. that have been killing jobs in California and the rest of the US the liberals have killed jobs with their EPA nuts. If you want to get people back to work stop all your madness and become business friendly again.

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