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Impact of High Oil Prices

Well, few signs of cooling in oil prices. Crude continued to flirt with $40 a barrel today, closing in New York at $39.37, down $0.20. Those high prices were also a major negative for the stock market today. But as Suzanne Pratt reports, experts say they`re unlikely to have a dramatic effect on the U.S. economy, this time.

History shows that expensive oil can do serious damage to the U.S. economy. It`s no coincidence that the gas lines of 1973 and '74 were followed by recession. The same can be said about the recessions of the early 1980s, 1990, and 2001, all were preceded by higher oil prices. That`s not to say that a spike in energy costs has been the only cause of stagnant economic growth. But experts do acknowledge higher oil prices can be a drag on consumer spending. Still, most do not expect current oil prices, which are close to $40 a barrel, to shove the U.S. economy into recession.

PRATT: Some experts say the economy is less vulnerable to pricey oil today because we are in the recovery part of the business cycle. In other words, if we have to have expensive oil, it couldn't come at a better time.

LAKSHMAN ACHUTHAN, MNG. DIR., ECONOMIC CYCLE RESEARCH: Inflation is at generational record lows. The leading indicators of the economy are very, very healthy. The job market is now finally showing some revival. I don`t think there`s ever a good time for high oil prices. But, this isn't the worse time for it...