How rising oil prices hurt the economy

The most obvious consequence is less spending by consumers, who represent a huge part of the overall economy. If folks have to fork over an extra $20 or $30 per fill up, they might be less likely to make discretionary purchases. Exactly where that tipping point lies is a matter of debate, but with the recovery still quite fragile it would seem that prices of $4 a gallon on up could do some damage. Right now, the average price in the L.A. area is over $3.57. The Atlantic's Daniel Indiviglio highlights some other concerns:

--Hiring slows (businesses become more skittish about higher costs)

--Home buying remains sluggish (especially in areas like the Inland Empire and Antelope Valley)

--Tourism takes a hit (one of the few industries in L.A. that has been picking up)

--Exports decline (more expensive shipping costs may weaken the demand for U.S. products).

--Deficits remain high (a slower economy would result in lower tax receipts)

Not surprisingly airline and retail stocks have been slumping in the last few days.