Argus Research economist Richard Yamarone can remember warning that the U.S. economy would suffer if oil prices stayed at $35 a barrel for a sustained amount of time.

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Although he was on safe ground in making the prediction -- most energy price spikes since World War II led to a recession -- thus far he's been wrong.

"That was one I don't brag about too much," Mr. Yamarone dryly observed yesterday after crude oil futures closed at a record $70, double the level that had him worried.

These days, he and fellow practitioners of the dismal science are offering a host of plausible explanations for why sharply higher energy prices haven't inflicted more damage: the economy is less energy intensive and more fuel efficient; rising energy prices are the product of strong global economic growth, not embargoes by the Organization of Petroleum Exporting Countries; low long-term interest rates have kept consumer spending strong; and the economy is more impervious to energy price spikes because of the bang-up job central banks have done fighting inflation since the energy crises of the 1970s.

Whatever the reason, the U.S. economy remains resilient, growing at a healthy 3.5 percent clip last year after a 4.2 percent advance in 2004. Job growth remains strong, unemployment is low, consumers are still spending and -- most importantly -- inflation remains in check.

The next government report on consumer price inflation comes tomorrow, but so far the news has been good. Consumer prices, including volatile energy and food costs, were up 3.6 percent in February from year-ago levels. Excluding those two sectors, inflation was 2.1 percent.

Global Insight economist Nigel Gault believes the growth of the information and service economies is one reason why the impact of higher energy prices has been so benign.

"We've been changing the structure of the economy, so energy-intensive activities aren't as important as they used to be," he said.

What remains of the manufacturing economy is more efficient. For example, in 2004, it took U.S. steel mills 11 million BTUs to produce and ship a ton of steel versus about 34 million BTUs in 1975, according to the American Iron and Steel Institute.

The progress is mirrored in the nation's gross domestic product, a broad measure of economic activity. Last year, it took only 54 percent of the energy it took in 1975 to create the same amount of GDP, Mr. Gault said.

Low long-term interest rates have helped blunt the impact. Although they only recently began moving higher as a result of the Federal Reserve's prolonged campaign to increase short-term rates, low long-term rates have encouraged consumers to take equity out of their homes by refinancing their mortgages.

"That's given them a source of funds to keep spending," Mr. Gault said.

Many analysts expected higher energy prices would change consumer behavior. To a limited extent, they have. The Port Authority cited higher fuel prices as one reason for a 3.2 percent increase in weekday ridership last year.

But Mr. Yamarone says that while lower-income consumers have changed their habits,higher income consumers haven't.

"Consumers are not about to abandon putting their kids in these gas-guzzling SUVs," he said. "Baby boomers think their kids are safer in an SUV than a fuel-efficient compact car."

Mr. Yamarone now says a sustained period of $70 oil will shave "a few tenths of a percent off economic activity."