What we know about the energy market’s $4.8 trillion-plus shortfall
Energy prices will continue to climb until the government finally manages the market, and there is little question that the market is going to get a lot harder to navigate in the coming months.
But the market’s fundamentals are in pretty good shape.
The biggest factor behind the price hike is the government’s intention to cut back on the number of hours people can work, or be at work, during the year.
The Congressional Budget Office has projected that the cutback could reduce the U.S. economy by about 0.8 percentage points by the end of the year, a loss of around 3 million jobs.
This is not a new problem for the U: A study by the University of Maryland and The Brookings Institution concluded that the number working more than 50 hours per week during the Great Recession reduced the economy by $2.6 trillion.
The cost of doing business and living more than 10 hours per day has been a growing concern for many of the companies that employ the workers most in the U, and it’s becoming harder to find qualified workers to fill these roles.
“The federal government has a very limited ability to control the number and duration of hours worked, and therefore the number that businesses can employ,” said David Pomerantz, chief economist for the University and the Brookings Institution.
Pomerantz also pointed out that the U-turn in the rate of unemployment that some companies were taking at the beginning of the decade could have helped to make the price hikes more palatable to business owners and investors.
The CBO’s projections for 2019 also suggest that the federal government will have to cut the number for 2019 from its current 8.1 million to 7.8 million jobs to meet the market demand.
Even if the cutbacks are approved, the Federal Reserve is still going to need to ramp up its lending to businesses.
A lot of economists believe the Federal Open Market Committee will need to raise interest rates to a level that would be sufficient to offset the cost of the higher rates.
“We think that the FOMC will have a decision to make on the federal funds rate, and that decision will be made over the course of this year, and if they choose to keep the current policy rate, then they’ll have to have the Fed increase their policy rate,” Pomeranz said.
What’s in a name?
Priced-out and priced-in The price hike will have an impact on the size of the market.
Most people are going to be very pleased with the new look of their energy bills.
However, prices for some energy-related products, such as natural gas and electricity, are likely to increase in price.
If the cost increase for your utility is so big, you might be able to use your old plan to pay for the new one.
According to the Energy Information Administration, energy costs for residential electricity are going up over the next few years.
You can read more about the impact of the price increase on your bills at EnergyBuddy.
Read more about energy costs in The Hill’s article: What you need to know about energy prices in TheHill’s 2018 Energy Index article: Why does my utility charge more than it costs?