Oil prices fall again; same goes at pumps
Oil prices shed nearly $4 Wednesday, tumbling to less than $125 a barrel for the first time since early June on growing fears that high prices and the weak economy are destroying demand. Light, sweet crude for September delivery dropped $3.98 to settle at $124.44 a barrel on the New York Mercantile Exchange, crude's lowest finish since June 4. The August contract expired Tuesday at $127.95. At the gas pump, prices continued to let up. Regular gasoline dropped more than a penny to an average of $4.0402 a gallon nationwide, according to auto club AAA, the Oil Price Information Service and Wright Express. That is down more than 7 cents from an all-time high July 17. Diesel slipped 0.6 cent to $4.802. A weekly report by the Energy Department's Energy Information Administration offered further evidence that cash-strapped Americans are cutting back on fuel. Demand for gasoline over the four weeks ended July 18 was 2.4 percent lower than a year earlier, averaging more than 9.3 million barrels a day.
A drooping economy
The country slogged through slower economic growth and rising prices during the summer, packing a double whammy to people and businesses. The Fed's new snapshot of business conditions, released Wednesday, also underscored the challenges confronting Federal Reserve Chairman Ben Bernanke and his colleagues as they try to get the economy back on track. For now, many economists predict the Fed probably will leave a key interest rate alone when it meets Aug. 5 -- given all the economic crosscurrents. Boosting rates to fend off inflation would hurt the fragile economy and the already crippled housing market. On the other hand, the Fed isn't inclined to lower rates because that would aggravate inflation.
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Federal wage boost
About 2 million Americans get a raise today as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike along to consumers. The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year's boost will bring the federal minimum to $7.25 an hour. It won't affect California workers because the minimum wage in the state is higher, $8 an hour.
The most-walkable cities are looking even better in the days of $4 gas.