Lower Gas Prices Drive Consumer Optimism
ALEXANDRIA, Va. — Consumer optimism experienced a six-point jump during the past month and is at its highest percentage since November 2015. Fifty percent of Americans expressed optimism about the economy influenced by lower gas prices, according to the results of a new consumer survey released by NACS, the Association for Convenience & Fuel Retailing.
Two in three consumers (67 percent) ages 18-34 say that they are optimistic about the economy, a 15-point increase from a month ago. Fuel consumers in the Northeast (56 percent) and Midwest (54 percent) are more optimistic about the economy’s prospects than fuel consumers in the South (47 percent) and West (47), the poll found.
The sustained period of lower gas prices appear to be the driving force behind the increase in consumers’ economic optimism, according to NACS, as more than four in five consumers (83 percent) ages 18-34 say that gas prices affect their optimism.
Higher optimism may also be a contributing to an increase in driving. Nearly one in four consumers (23 percent) say that they will drive more this month, vs. 16 percent in March 2015 who said they would drive more over the next month.
The poll also showed that while consumers say they are much more optimistic about the economy, they report seeing a small uptick in gas prices. Fuel consumers saw a median gas price of $1.80 per gallon, a one-cent increase from the February 2016 median of $1.79. This increase, however small, represents the first time consumers have reported a price increase of any size since June 2015, NACS reported.
One in three consumers (34 percent) say gas prices have increased in their area in the past month, vs. 68 percent who noticed gas prices increasing in March 2015. NACS notes significant regional differences: 16 percent of consumers in the Northeast report increased prices, while 53 percent of Midwesterners have seen higher prices at the pump this month.
When asked about gas prices 30 days into the future, a majority of consumers (53 percent) say they expect gas prices to rise, while one in eight (12 percent) are expecting gas prices to drop over the next month. This is the highest percentage of U.S. fuel consumers expecting higher prices since July 2015, when 54 percent expected increases in gas prices. However, it is still significantly fewer than in March 2015, when three in four drivers (73 percent) said they though gas prices would increase.
Despite the slight increase in gas prices, miles per dollar — a calculation of gas prices related to vehicle fuel efficiency — hit a new high of 13.22 miles per dollar in March, according to NACS.
“There is a lot of good news for retailers in these results. People feel better about the economy and want to travel more. The key is whether they also will want to spend more and the results right now are mixed, with only 19 percent of Americans saying that they will spend more this month — the same level as in March 2015. Convenience retailers are optimistic that the increase in consumer sentiment and warmer weather will help grow sales at stores,” said Jeff Lenard, NACS vice president of strategic industry initiatives.