As Labor Day approaches, gas prices are a major reason for consumer pessimism.
Nearly 6 in 10 consumers (58%) noted that they are pessimistic about the economy, according the latest monthly NACS Consumer Fuels Survey.
The latest numbers are in stark contrast to early July, when consumer pessimism was at 52%—the lowest level of the year. Since then, oil prices pushed to 16-month highs and gas prices also rose, helping to trigger the largest increase in pessimism this year.
There were some demographic variations within the numbers. Women are more likely to be pessimistic: 61% of women noted that they are pessimistic about the economy, as opposed to 55% of men. Younger consumers, those ages 18-34, are the least likely to be deeply pessimistic, with only 12% saying that they are “very pessimistic.”
The national consumer survey commissioned by the National Association of Convenience Stores (NACS) was fielded Aug. 7-9, when national gas prices averaged $3.62 per gallon, roughly 15 cents higher than the month prior, based on reported weekly gas prices from the Oil Price Information Service (OPIS).
Nearly 9 in 10 consumers (88%) said that gas prices impacted their feelings about the economy, also the highest percentage since March. They also are keenly aware of gas prices in their area. When asked the price of gasoline in their area, the mean consumer response was $3.65, within a few cents of the national average.
“Our monthly surveys continue to confirm that gas prices play a huge role in consumer sentiment about the overall economy,” said NACS Vice President of Government Relations John Eichberger. “We expected that the price fluctuations over the last few weeks would affect consumer sentiment. Given the limited control retailers have over fuel prices, such a swing in sentiment should be a source for concern.”
It’s hard to find a lot of good news in the latest survey results, but there is some: consumers don’t expect prices to climb much higher and that may bode well for consumer sentiment in September. Just over half of consumers (51%) expect gas prices to rise over the coming 30 days, a decrease from a month ago, when the 64% (correctly) said that prices will rise.
Every month, the National Association of Convenience Stores (NACS) conducts a 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 August survey, 801 gas consumers were surveyed from Aug. 7-9, 2013. The margin of error for the entire sample is +/-3.46 at the 95% confidence interval and higher for subgroups. The OPIS weekly national average price for gas was $3.622 on Aug. 5, the week in which the survey was fielded.