US fuel prices continue to rise. August NYMEX gasoline futures price cleared $3 a couple of days ago and is now at the highest level for 2013.
This introduces two new challenges for the US economy:
1. Fuel prices tend to influence consumer sentiment and spending. The sentiment is not necessarily linked to how much consumers actually spend on fuel.
Rather, it’s connected to the psychology of seeing a sudden spike in this index that most Americans see on a daily basis.
And improvements in US consumer sentiment have already stalled recently.