Oil is back above $100—but economists say that number isn’t the real threat to the U.S. economy

When the news this week came out about oil spiking back up above $100 a barrel, analysts didn’t seem to be too concerned. This may be unusual: in the past, oil price surges sent shockwaves through markets and the economy, causing long lines at gas stations and frustrating drivers. But this time, economists say $100 oil is less alarming than the number traditionally suggests.

Brent crude oil climbed as high as nearly $110 a barrel on Monday, up 4%—its highest price since May, before easing to around $107 on Tuesday. The increase raised concerns about inflation and borrowing costs, evoking memories of the oil shock stories from years ago. Back in 1980, Americans spent about 6% of their income on gas because they used more and prices were relatively high, according to JPMorgan’s analysis. Today, that share is about 2.5%.

That doesn’t mean economists are completely at ease. Their greater concern is not that crude crossed........

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