Oil prices spread to grapes, TVs, pizza

That said, many economists remain sanguine, contending that the impact of the higher oil costs on the overall economy won't be that great.

Last week the Federal Reserve said it believed that the impact of higher fuel costs had not "notably fed through to core consumer prices." While over the long term, they may shave a half point or more off the GDP, adjustments to the economy are expected to be gradual, according to Thorsten Fischer, a senior economist at economy.com.

Today's energy crisis - if it can be called a crisis - is very different from the one in the 1970s. This hike in prices is driven by increases in demand from a robust economy not just in the US, but around the world. In the 1970s, the economy was already struggling when oil prices spiked due to a lack of supply.

"I don't think there's too much reason to be concerned," says Mr. Fischer. "We're going to have a little bit of a cutback in consumption, but still strong growth."

Some families are already trying to save gas, combining trips to the supermarket, hardware store, and play dates, for instance, instead of taking each one individually. And some new car buyers are now shying away from the ubiquitous SUVs. Car dealerships are seeing backlogs on the lots, and so they're increasing the incentives to keep them moving. That hasn't stopped several temporary plant closings in Detroit.

Higher gas prices affect SUV and truck sales on several levels. "It reduces the amount of generally available disposable income for consumers, it decreases the resale values of SUVs because they are less fuel efficient, and it makes the current operating costs more expensive," says Steven Szakaly, an economist at the Center for Automotive Research in Ann Arbor, Mich.

While some people are looking to economize on gas, some businesses are having to continue to absorb the higher costs, even though they're now cutting deeply into the bottom line. Private transportation companies are among them. John Ramsey of Garden State Limousine says that five years ago the average cost of gas for a limousine pickup at the airport in Newark, N.J., would be $5. For the same trip today, gas costs $7. Although air traffic has returned to pre-9/11 levels, he says his company has not seen demand for limousine services increase noticeably, and so it hasn't raised its rates in more than four years.

And the airlines themselves, many of which are in bankruptcy or battling to avoid it, have also been reluctant to pass along the higher price of jet fuel, at least on the domestic front. That's where the major legacy carriers face fierce competition from the low-cost carriers, and they're determined not to lose more passengers to them. But the majors are now slapping large fuel surcharges on international travel, where there's less competition. It's one of the few ways they're hoping to increase revenues as they face their fifth straight year of multi-billion dollar losses.

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