Consumers May Pack Tighter Budgets This Summer as Gas Prices Rise
ALEXANDRIA, Va. — Although Americans say that higher gas prices won't limit their driving this summer, higher gas prices may affect their discretionary spending, according to the latest NACS Consumer Fuels Survey.
Only 11 percent of Americans say they will drive less this month than in April, despite gas prices that are 15 cents higher than a month ago and 47 cents higher than May 2017, NACS, the Association for Convenience & Fuel Retailing found.
To tighten their budgets, a third of fuel consumers (34 percent) said they will eat out "much less" or "somewhat less" this month compared to 27 percent who said they would eat out much less last month. Similarly, nearly a fifth (22 percent) of those surveyed say they are likely to spend "much less" or "somewhat less" on typical non-gas household purchases, like groceries and clothing, than they did last month compared to 16 percent who said so in April.
While gas prices continue rise due to higher oil prices and the seasonal transition to summer-blend fuel, consumer optimism about the economy remains strong. Sixty percent of respondents say they are optimistic, representing only a 2-point drop from last month and the same percentage as May 2017.
Optimism is higher among men than women (66 percent vs. 55 percent), and looking from a regional respective, the same can be said of the Midwest (63 percent) and West (62 percent). The lowest level of optimism was reported in the Northeast and South, tied at 59 percent.
NACS Consumer Fuels Survey also found that:
- 57 percent of respondents said last month that they expected prices to continue to rise, and consumers this month expect the same;
- 67 percent expect gas prices to rise in the next 30 days;
- 25 percent expect prices to remain steady; and
- Less than 10 percent believe gas prices will drop.
"Despite recent gas price increases, it looks like highways will be crowded with travelers this summer. However, there are concerns about how much they may spend, especially as three in four drivers (77 percent) say that gas prices influence their feelings about the economy, a 5-point jump from just a month ago," said Jeff Lenard, NACS vice president of strategic industry initiatives.
The May 2018 NACS Consumer Fuels Survey was conducted online from May 7-11 by Penn Schoen Berland. Approximately 1,501 U.S. adults who purchase fuel for a vehicle such as a car, truck or van at least once per month were surveyed.
Alexandria-based NACS represents the convenience store industry that sells an estimated 80 percent of the fuel sold in the U.S. It has conducted regular surveys related to economic issues and consumer sentiments since January 2013.