As the new year begins, consumers are feeling better about the economy than they have since last summer, according the latest monthly NACS Consumer Fuels Survey that examines how gas prices affect consumer sentiment.
Though most consumers still say that they are pessimistic about the economy, 43% of consumers say that they are optimistic about the economy, the highest level of optimism since July 2013. The rise in optimism is seen consistently across all parts the country, even in the Northeast and Midwest, where consumers were affected by record-cold temperatures during the Jan. 7-9 polling period.
For more than a year, at least 83% of consumers have said that gas prices impact their feelings about the economy and that sentiment continued in the first month of the new year, with 85% of consumers indicating that.
However, for only the third time in the past 12 months, a rise in gas prices did not lead to a rise in pessimism, or vice versa. The increase in optimism occurred in a month of rising gas prices in which gas prices increased by roughly a nickel a gallon.
Instead, consumers are feeling very optimistic about gas prices in the near future. More than half (53%) of consumers say that gas prices will be the same or lower in the next 30 days, with a record-low 7% saying that prices will be much higher.
Also reflective of the current consumer optimism, drivers say prices would have to increase significantly before they would consider reducing the amount that they drive. On average, gas purchasers say prices would have to reach $4.04 a gallon before they would cut back driving— a 71 cent price increase beyond the current national average. This price differential is the second-largest since NACS began measuring this statistic in May 2013.
“Future prospects are outweighing current conditions in defining consumer sentiment,” said NACS Vice President of Government Relations John Eichberger. “While it remains to be seen if conditions do in fact improve, consumer optimism is great news for consumers, retailers and the economy as the new year begins.”