Gasoline is delivered, in Oakland, Calif. Consumers spending rose in February at the fastest pace in four months, but a big part of the increase went to cover higher prices for gas. (AP Photo/Ben Margot, file)By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON – Americans are earning and spending more, but a lot of the extra money is going down their gas tanks. Gas prices have drained more than half the extra cash Americans are getting this year from a cut in Social Security taxes.
Unlike some other kinds of spending, paying more for gas doesn’t help the economy much. Most of the money goes overseas, and higher prices leave people with less money to buy appliances, computers, plane tickets and other things that can be postponed.
“When food and gasoline prices are rising, it causes people to hunker down,” said Chris G. Christopher Jr., senior economist at IHS Global Insight.