NEW YORK (AP) - As the U.S. economy recovers and adds more jobs, Americans are paying the price at the gas pump.
The government said Friday that the nation's unemployment rate dropped to 8.5 percent, the same day that gasoline prices hit an average of $3.35 a gallon, the highest ever for this time of year.
Gasoline prices are rising again after falling in the last months of 2011. Motorists are buying less gas than they did a year ago, but pump prices are rising with higher oil prices.
"It's difficult to raise prices when gasoline demand is so anemic," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. But if the cost of oil goes up, "you have to pass it along" to the consumer, he said.
Kloza expects pump prices will average between $3.75 and $4.25 a gallon this year. They could be around $4 a gallon by spring.
Oil prices started 2012 on the rise, continuing a trend from last year. The price of benchmark U.S. crude rose 19 percent in 2011 to an average of about $95 a barrel.
The price of benchmark crude rose 3 percent this week, though it was down slightly on Friday. The positive U.S. jobs numbers and weak economic data in Europe boosted the dollar against other major currencies, including the euro. Oil is priced in dollars, and it tends to fall as the dollar rises and makes crude more expensive for investors holding foreign money.
Benchmark crude fell 25 cents to end the week at $101.56 per barrel in New York. Brent crude, which is used to price foreign oil varieties that are imported by U.S. refineries, rose 32 cents to finish at $113.06 per barrel in London.
Oil prices jumped above $100 a barrel this week on growing tension in the Persian Gulf. Iran has threatened to block the Strait of Hormuz, if the U.S. and other nations enforce more economic sanctions against Iran because of its nuclear program. The strait provides the only way out of the Persian Gulf for oil tankers carrying one-sixth of the world's exports. Experts say it's unlikely that Iran could follow through with its threat, but fears of military action could slow shipments at a time when global demand is higher than ever.