What does the coming year hold for the economy? BloggingStocks' Peter Cohan considers five issues that will factor heavily in 2008.
Oil prices near $100 are hurting many middle and lower income Americans – particularly those in cold parts of the country where heating oil prices are at record levels. 55% of the 149,000 people who responded to a poll of the most worrisome consumer trends ranked oil prices as their chief concern -- 24% ranked subprime mortgages most worrisome.
Many Americans are being forced to cut back on discretionary spending to keep the heat on in their homes and to pay for the gasoline needed to get back and forth from work and to shuttle their children.
Wealthier Americans just pay the higher prices and grumble without changing their consumption patterns.
What is your experience?
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
12-17-2007 @ 3:32PM
william lindblad said...
Pete:
This is really an unfair comment as I am retired and have limited control over energy cost. However, there are some things that all can do. (1) Your vehicle - which is the best bargain. A Hybrid that gets 40 mpg and costs 30,000 or a domestic that gets 34 and costs 16,000? (both figures are highway) I opted for the second choice 5 years ago and have been saving all along. Unforunately, most Americans have a love affair with the large gas guzzlers. A little common sense is in order if you want to keep some of your money.
On home heating you can lower the thermostat, look for ways to improve insulation, explore secondary sources (coal,wood if practical) and any solar caputre effect your home may have. If you have an old furnace that is in the 70% effective range of claiming heat you might want to look to a more efficient unit as oil is not coming down in price any time soon.
Simply put, people have to change their ways. Electricity, natural gas and food are all on the rise and most do not know how to lower these costs. Time to learn as there are ways.
As a footnote I add this: If you have a fireplace (it's a Rumford) it is highly inefficient and burning wood in it sucks more heat out than it puts in. Even with glass doors they are only about 15% efficient. Anyone who wants an efficient back up space heater should look into the monitor vented kerosene models. 95% efficient.
1-07-2008 @ 4:09PM
James Slack said...
I'm curious to know why Americans still use oil rather than some other energy source for heating? I'm from Australia where oil heating was phased out over 20-30 years ago. Why not use electricity and/or gas? Given the sensistivity of your economy to oil prices, it seems crazy to waste oil on heating if other alternatives exist.