NEW YORK (CNN/Money) -
Economists agree that oil prices have already spiked enough to take a bite out of the nation's economic growth. But what they can't agree on is whether this downswing could spiral into a full-blown recession.
Oil futures on Tuesday moved above $54 a barrel for U.S. light crude, up from the fifth straight record close it hit Monday.
On an inflation-adjusted basis, however, recent prices are still below the highest prices of the 1980 oil shock. The $38-a-barrel peak then would be the equivalent of about $79 a barrel today, said Fadel Gheit, Oppenheimer oil analyst. In 1990, when Iraq invaded Kuwait, oil approached $40 a barrel -- between $60 and $65 in 2004 dollars, he said.
But Gheit holds the minority view that today's oil price levels are already enough to cause an economic contraction.
"We're the walking wounded," he said. "We've already been hit, and in the next three or four months is when we'll stumble."
Gheit said one advantage for the economy is that it's far less dependent on oil today than it was in the 1970s or 1980 oil shocks.
“ I think $80 would probably break the back. ”
"Our dependence is almost one third of what it was 30 years ago," he said. "We're moving into more of a service economy, not dependant on smokestack industries. Thirty years ago there was no Microsoft."
Other economists aren't quite as concerned about contraction, although most say there has been a significant impact on the economy from current prices.
"I think energy affects us at every price. As we go marginally higher, growth forecasts get marginally weaker," said Steven Wieting, senior economist at Citigroup. "At roughly $50, oil should be holding back GDP (gross domestic product) growth by a full percentage point in the year to come. Fortunately, we have more than a percentage point to give."
But even some of those who believe $50 oil increases will have only a limited effect say they're concerned about how fast prices have risen. In little more than four weeks, they've skyrocketed about 25 percent.
"The problem we have had in the past four weeks is that the speed of the increase is unprecedented," said A.F. Alhajji, energy economist at Ohio Northern University. "We've been talking about economic growth in the face of $50 oil for a while, but we were talking about it increasing gradually."
Still, other economists say they're not overly concerned about the economy falling into contraction or recession, even though past oil spikes have produced just such economic woes.
"There are times when the economy is quite vulnerable, so a gentle push (from oil) can tip the economy into actual recession," said Anirvan Banerji, director of research at the Economic Cycle Research Institute, which forecast the 2001 recession based partly on the oil price increase seen in 2000. But Banerji said the economy is showing greater strength today in other measures than it did in 2000.
"A rise in oil prices might take a bite out of growth. But is there a magic number of what's enough to trigger recession? No," he said.
John Silvia, chief economist at Wachovia Securities, is another economist who believes it will take a combination of high oil prices and other factors, such as significantly higher interest rates, to actually spark a recession. But he says some of the worst-case scenarios for oil prices do worry him.
"I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem," Silvia said. "I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back."