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Fuel Prices May Throttle Economic Recovery

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Aired 4/25/11

San Diego's economy is starting to feel the pinch from higher fuel prices. A San Diego State University Business professor doesn't see fuel prices stopping the region's uneven economic recovery.

— The region's leading economic indicators offer a tepid view of the economic recovery. San Diego's job and housing markets continue to lag improvements in local stock prices and consumer confidence.

A steady two-month rise in gas prices helped stoke inflation fears, according to San Diego State University professor Dan Seiver. He works in the Finance Department of the School of Business. High prices, said Seiver, are squeezing the economy, but haven't shut off the recovery yet.

"I think the economy is still moving forward, and this is more like some periodic tapping of the brakes," said Seiver. "But I think if we went over 5 (dollars a gallon) it would be more like hitting the brake pedal a little harder."

There's a chance gas prices could puncture the $5 barrier, but oil prices would have to spike up sharply for that to happen, said Seiver.