The housing downturn and rising gasoline prices are each exerting a significant contractionary influence on U.S. GDP. There is also an interactive effect between the two.
Temecula is a community in southern California some 60 miles from downtown San Diego and not a whole lot closer to anywhere else. And yet I've known people who commute to work here from Temecula, having been willing to trade driving time for more affordable housing. The population of Temecula doubled over the last decade.
But with gas now nearing $4.50 a gallon in San Diego, the housing-commuting tradeoff is looking a lot less favorable for these exurban communities. Via Calculated Risk, the Los Angeles Times reports that as many as 15% of the homes in Temecula are currently either bank-owned or in some stage of foreclosure.
If you make your living trying to provide goods or services to those residents, higher gasoline prices are hitting your wallet by much more than the cost you personally pay for your own gasoline.
Source: New Jersey Gas Prices.