New York (CNN) — The US jobs market is on fire. Consumer spending is strong. And the economy is growing at a brisk pace.
But there is a growing threat to that sunny economic backdrop: surging oil prices.
US oil prices are rapidly approaching $90 a barrel. Global oil prices are flirting with $92 a barrel amid worries about a wider war in the Middle East. And this has lifted gasoline prices to their highest levels in five months.
The risk is oil prices keep climbing, hurting consumer spending and undoing the meaningful progress on inflation. That could cause the Federal Reserve to delay interest rate cuts and spook investors on Wall Street.
“It’s the most serious threat to the economy,” Moody’s chief economist Mark Zandi told CNN in a phone interview. “Nothing does more damage to the economy more quickly than higher oil prices.”
Not only that, but enormous political consequences could follow if gasoline prices spike above $4 a gallon and stay there.
Moody’s published a model earlier this year that showed gas prices are a key variable in the November election, one that could tip the scales in the favor of former President Donald Trump.
“If they go above $4 a gallon for more than two or three months, Trump will win,” Zandi said.
US oil prices surged above $87 a barrel late last week for the first time since late October, leaving them…
