Graph of the Day: Oil Price and Recessions, 1973-2010

By Gail the Actuary
28 March 2011 The idea that high oil prices cause recessions shouldn’t be any surprise to those who have been following my writings, those of Dave Murphy, or those of Jeff Rubin. Last month, though, the Wall Street Journal finally decided to mention the idea to its readers, in an article called “Rising Oil Prices Raise the Specter Of a Double Dip“. The quote they highlight as a “call out” is

When consumers spend more at the pump, they often cut back on discretionary purchases.

The WSJ shows this graph, linking oil price hikes to recessions…

WSJ, Financial Times Raise Issue of Oil Prices Causing Recession