The Commerce Department reported last week that consumer confidence had plummeted almost 19 points in September, its biggest drop in 15 years. One big reason is clear - we have finally become convinced that higher energy prices are here to stay.
Americans can expect to pay thousands more in the coming year to heat their houses and drive their cars. The rapid increase in energy costs will be felt indirectly too, as airlines, delivery services and companies that use petrochemicals in manufacturing scamper to cover their higher costs with higher prices.
Still, many families won't stop driving their SUVs or turn the thermostat down to 65. The reason: steady appreciation in home values and interest rates that remain relatively low in historical terms make some homeowners feel affluent enough to weather higher energy costs.
But for seniors living on fixed incomes, or lower-income families that are renting, the higher gasoline and heating costs are likely to bite deeply. Spending on transportation to and from work frequently can't be cut, and the poor don't have much extra money to make their houses more efficient.