Strain at the pump

By R.A. | WASHINGTON

WHILE everyone is watching markets for any sign of panic, they might direct their eyes to the commodity section of the screen, where prices on West Texas Intermediate—oil—have returned to triple digits. Petrol prices are following suit:

In the event of a debt-related calamity, this won't much matter. If, however, an immediate collapse is averted, rising petrol costs could throw yet another wrench in the machinery of recovery.

Dear petrol was one of the temporary factors cited by economists, including those at the Fed, as a contributor to disappointing growth performances in the first and second quarters. When oil prices leveled off and began declining, a major source of pressure on household budgets eased, clearing the way for a return to more rapid growth.

But that respite seems to have been frustratingly short-lived. Indeed, commodities as a class have turned around since late June, driven by strength in emerging markets. I had hoped that emerging-market efforts to tighten policy in order to combat inflation would slow growth in commodity demand and give struggling advanced economies a bit of breathing space. That may have been too optimistic.