Consumer Pessimism Deepens Despite Continued Gas Price Drop
ALEXANDRIA, Va. – Despite two straight months of gas price declines, consumer pessimism continues to deepen, with 23 percent of consumers now saying they are "very pessimistic" about the economy, according to the monthly NACS Consumer Fuels Survey. This ties for the highest level measured in 2013 and also marks the fourth month in a row of increasing consumer pessimism about the economy.
Overall, despite a 22-cent drop in gas prices over the past month, 65 percent of consumers say they are pessimistic about the economy. This is the second straight month that pessimism increased despite declining gas prices, reversing the trend of the first eight months of the year when increased pessimism was tied to gas price increases.
National events seem to be the primary factor driving pessimism, rather than gas prices, according to the latest NACS report. Forty-six percent of consumers say the government shutdown has a "great impact" on their feelings about the economy, and only 16 percent say the shutdown has little or no effect on their views on the economy. Thirty-six percent of consumers say gas prices have a "great impact" on their feelings about the economy.
"We know that gas prices play an enormous role in overall consumer sentiment. However, this influence can be overshadowed by significant world or national events," said NACS' Vice President of Government Relations John Eichberger.
Despite the high pessimism levels, consumers are optimistic that gas prices will continue to decline. For the first time this year, less than half of consumers, 45 percent, say gas prices will be higher next month.
"Of course, world and national events will ultimately determine oil and gas prices over the next month. But the fact that consumers are not dreading future prices is a positive indicator about the economy in general," Eichberger said.
NACS, the Association for Convenience & Fuel Retailing, conducts the monthly nationwide survey in partnership with Penn, Schoen and Berland Associates LLC to measure consumer perceptions about gas prices and how they relate to broader economic conditions. For the October survey, 80 gas consumers were polled from Oct. 8-10.