One ingredient that helps the economy run like a well-oiled machine is...well, oil. So when oil prices go up, it can affect a lot more than how much you pay at the pump. Here’s what else it means for your wallet.
You could pay more for everything from flights to food. A lot of businesses rely on planes, trains, automobiles, and other machinery that require oil to get the job done. When oil prices rise, some pass those higher costs onto consumers. On top of more expensive utility bills and plane tickets, you could pay more for everything from food harvested with gas-powered tractors to furniture shipped cross-country.
Your investments may hit some turbulence. When the cost of doing business goes up, bottom lines can take a hit. Meaning stock prices for companies that rely on oil — airlines, cruise lines, and even big shipping retailers like Amazon — could go down. But it’s not all bad. Oil and gas stocks (think: Halliburton and Chevron) tend to have really good days when oil prices jump.
The economy will (probably) keep on keepin on. In the past, high oil prices have been linked to some not-so-fun economic activity. Like recessions. But experts say that’s less likely to happen now, thanks to more domestic oil production and an economy that relies less on the manufacturing industry than it used to.
theSkimm: A big jump in oil prices might not be enough to change the path the economy’s driving down. But it could affect what you pay for a lot of necessities. And your investments. So power up your personal savings where you can by looking for easy ways to save on your utility and food bills.