Declining gas prices may increase holiday spending this year—especially among men and those ages 18-34, according to a new national survey measuring consumer optimism.
For the first time in two years, a majority of men (51%) are optimistic about the economy and an even greater percentage of younger consumers (56%) are optimistic—and both groups say that they are more likely to increase their spending this holiday season.
Consumer confidence remains elevated as gas prices have dropped nearly 70 cents per gallon to under $3 per gallon over the past four months. For every one-cent decline in gas prices, Americans save an estimated $3.7 million per day at the pump.
Overall, consumer optimism about the economy held steady at 46%, making November the fourth out of five months that optimism was 46% or higher, according to the latest consumer survey conducted by the National Association of Convenience Stores (NACS).
Consumers also have expectations about future gas price declines—over one in four (26%) consumers say that they think gas prices will be even lower in 30 days than they are today. This is the most positive gas price forecast made by consumers since NACS initiated its monthly consumer surveys in January 2013.
Likely as a result of lower prices at the pump, more Americans say they will spend more money this month than they did last month (excluding gas). One in five (21%) U.S. gas consumers say their spending will increase in November, compared with 15% in October. Nearly one in three (32%) of those ages 18-34 say that their spending will increase.
Will the expected increase in spending translate into strong sales this holiday season? While nearly two thirds (65%) of Americans say that they will spend the same this holiday season, only one in seven (14%) consumers say that they intend to spend more this holiday season because of lower gas prices. The two groups most optimistic about the economy are also the most likely to increase their holiday spending because of lower gas prices: 27% of those ages 18-34 and 18% of men intend to increase their holiday shopping because of lower gas prices.
“Our surveys over the past two years show that gas prices clearly play a major role in consumer sentiment about the economy,” said Jeff Lenard, NACS’ vice president of strategic initiatives. “However, declining gas prices alone may not take consumer sentiment much higher in the short term. It may take similarly positive news about the economy as a whole before the majority of Americans feel positive about the economy.”
NACS, which represents the convenience store industry that sells 80% of the gas sold in the country, conducts the monthly consumer sentiment survey to gauge how gas prices affect broader economic trends. The survey was conducted by Penn, Schoen and Berland Associates LLC; 1,110 gas consumers were surveyed Nov. 5-7, 2014.