Consumer Optimism Not Hampered by Rising Gas Prices
ALEXANDRIA, Va. — Consumer optimism is off to a strong start in 2017, despite a continued rise in gasoline prices. For the third consecutive month, a majority of consumers (57 percent) said they are optimistic about the economy, despite gas prices rising each month, according to the latest consumer survey from NACS, the Association for Convenience & Fuel Retailing.
Fuel consumers enter the new year significantly more optimistic than they did entering into 2016; at that time, less than half of consumers (47 percent) reported feeling optimistic about the economy they faced, the association found.
The reported median gas price was $2.30 per gallon, an 11-cent increase from the December 2016 reported median of $2.19 per gallon. This month’s reported median price represents a cumulative 15-cent increase since November 2016 ($2.15), and a year-over-year increase of 32 cents from January 2016’s reported price of $1.98.
Over the last three months, consumers note a rise in gas prices. In December 2016, one in three consumers (38 percent) reported noticing higher prices, and in November 2016, one in four consumers (27 percent) acknowledged a rise.
Kicking off the new year, three in five consumers (61 percent) have noticed that gas prices are "much" or "somewhat" higher than they were last month. There is a noticeable difference regionally: 71 percent of Northeast consumers reported higher prices at the pump, while only 46 percent in the West reported higher prices.
Fuel consumers expect this higher-fuel trend to continue into the new year. More than half of consumers (56 percent) predict that gas prices in 30 days will be "much" or "somewhat" higher than they are this month vs. 32 percent of consumers at the same time last year who said they expected gas prices to be higher in 30 days.
Despite expectations of rising gas prices, consumer economic optimism held strong and steady this month, with 57 percent of gasoline consumers saying they feel "very" or "somewhat" optimistic about the economy. This is a minor decline from the historic, all-time high noted in the December 2016 study (60 percent optimistic).
Approximately 50 percent of consumers were the least optimistic in the Northeast, the region most likely to have reported higher prices, while 60 percent of consumers in the West reported the most optimism. This region is the least likely to have reported higher prices at the pump.
Significantly, from its findings in the past, NACS found that consumers over the age of 50 are more optimistic about the economy than those ages 18-34 (59 percent vs. 54 percent, respectively).
"Strong economic sentiment may help continue to push sales at convenience stores and other retail outlets," said Jeff Lenard, NACS vice president of strategic industry initiatives. "Nearly one in five consumers (18 percent) say they will shop more this month — despite January traditionally being one of the slower shopping months of the year. And virtually all drivers (89 percent) expect to be driving either the same amount (67 percent) or more (22 percent) than they did last month."
NACS represents the convenience store industry that sells 80 percent of the gas in the United States. The association conducts monthly consumer surveys to gauge how gas prices affect broader economic trends. The survey was conducted online by Penn Schoen Berland. From Jan. 4-6, it surveyed 1,114 U.S. adults who purchased fuel for a vehicle such as a car, truck or van at least once per month.