How the spike in gas prices is jolting California's giant economy

This is read by an automated voice.Please report any issues or inconsistencies here.

With crude oil topping $100 a barrel, and the average price of gas in the state approaching $5.50 a gallon, every touch of the nozzle is painful for California drivers.Now, with the Iran war nearing its third week, the soaring costs of energy are rippling through the world’s fourth-largest economy.While economists say it‘s too early to gauge the long-term impacts on the state, one thing is clear: The higher cost to fill gas tanks is eating into Californians’ disposable incomes — what’s spent to buy food and other necessities, or to go out and have fun — while reducing the income of businesses, also facing higher fuel costs.“Inflation and affordability have been a big concern for the American public, and the longer this goes on, the greater risk there is of increasing overall inflation,” said Trevor Higgins, senior vice president for energy and the environment at the Center for American Progress.The group released a report this week documenting the inflationary impacts of the war and past conflicts.The price of a gallon of gas hit $5.37 on Thursday, up 82 cents from a month ago, according to AAA.

The state consistently has the highest prices in the nation due to taxes, clean air rules and supply constraints.Before the start of the war, the California economy seemed poised for strong growth despite a lagging jobs market that has seen multiple employers — including several major tech companies such as Google, Block and Autodesk — slash payrolls by the thousands.The state’s economy grew at a robust 3.8% annualized rate in the fourth quarter, driven by artificial intelligence investment, the burgeoning aerospace industry and other high-productivity sectors, according to the UCLA Anderson Forecast released early this month.Business Inflation stayed stubbornly elevated last month as gas prices rose in a snapshot of what consumer prices looked like before the U.S....