Soaring gasoline prices drove the consumer price index up 0.6 percent in September, matching the August gain which was the largest increase since June 2009, the Labor Department announced today.
Gas prices remain stubbornly near their September highs, posing a peril to President Obama’s reelection. Consumers are particularly sensitive to paying more to fill up the car and are constantly reminded of the hardship as they pass gasoline stations all day long.
The growth in the price of gasoline is threatening consumers’ spending power, as hourly wages adjusted for inflation fell 0.3 percent in September after dropping 0.6 percent in August, Bloomberg reported today.
A gallon of gas now averages 3.82 across the nation, nearly 50 cents higher than in July. Gas prices rose seven percent in September and nine percent in August.
There is strong historical evidence to suggest that gasoline prices figure prominently in voters’ choices in a presidential election, whether they realize it or not, .
According to a White House Dossier analysis of data from the Department of Energy, in every election but one, stretching all the way back to 1976, if the price of gasoline was higher on Election Day than four years before, the incumbent president or the candidate of his Party seeking to succeed him lost.
Rising gas prices may also provide ammunition to Gov. Mitt Romney as he charges that Obama has failed to focus sufficiently on developing fossil fuel resources, including nixing of the Keystone Pipeline project.
Obama in 2008 suggested he was OK with rising gas prices as a means of pushing Americans toward use of alternative energy.
Outside of gas prices, the CPI was relatively stable, and economists are not expecting huge jumps in the future, although some worry that massive bond buying by the Federal Reserve could put pressure on prices to rise.