That's a sobering thought for Natalie Alderete, a 30-year-old single mother who was taken aback by the $3.49-a-gallon price for regular gasoline posted at a 76 station in downtown Los Angeles.
"This is a scary price for me," Alderete said as she pumped $5 worth of gas Thursday -- enough to get her home to La Puente, where fuel prices were cheaper. Her gasoline bills have nearly doubled and are straining an already tight budget, she said.
Ken Matheny, senior economist at Macroeconomic Advisers in St. Louis, said the jump in producer prices, although attention-getting, was not necessarily bad news. He's looking to November's consumer price index, due to be released today.
"The far more important report will be the CPI, but I don't expect to see a big surge outside of the more volatile food and energy elements," Matheny said.
Peter Kretzmer, a senior economist at Bank of America Corp., said the retail sales jump was significant.
"What are people doing about high energy costs? They are still spending," Kretzmer said. "This month, gasoline prices soared yet people not only paid for gasoline but also went to the stores."
That bodes well for economic growth, which many people have been predicting would stagnate this quarter, said Ken Beauchemin, a director at Global Insight, a Washington-based economic forecasting company. He pointed to the 1.9% increase in retail sales, minus spending on food and fuel.
"That's a pretty strong number, and it implies a stronger likelihood that consumer spending will stay strong," Beauchemin said.
Naroff, however, noted that in anticipation of a dismal holiday retail season, many retailers began discounting early and may have drawn more shoppers into their stores sooner. In addition, with Thanksgiving falling earlier than usual, November included an extra week of holiday shopping.
"There's a real serious question whether it will be sustained," Naroff said.
Reynolds reported from Washington, and Douglass and Kim reported from Los Angeles.