In fact, they re part of the wall of worry that every newborn bull market for stocks must climb. We ve become dramatically more efficient energy users. As a result, a sudden jump in energy prices has a much smaller impact on business activity than it did, say, during the 1973 Arab oil embargo. Today s oil and gas shortage is already well on the way to being resolved. Since the first quarter of 1999, the number of drilling rigs in operation nationwide has more than doubled.
Supply is still behind demand, but catching up fast.
The gasoline price spike is likely to end in June. California s power woes, while serious, aren t insurmountable. Alan Greenspan is standing by, ready to lower interest rates again, if necessary. Undoubtedly, the energy squeeze has played a role in the business slowdown that began last fall. By allowing bank lending rates to plunge, though, the Federal Reserve is offsetting much of the drag.