After a week of rising gas prices, a majority of consumers think that the good times of falling gas prices are over.
Almost six in ten consumers (58%) say gas prices will be higher in 30 days, nearly double the proportion who said so a month ago (31%).
Despite rising gas prices, a majority (54%) of consumers are optimistic about the economy, a drop from 57% in January but still the second highest level since January 2013, according to survey results released by the National Association of Convenience Stores (NACS). Men are significantly more optimistic about the economy than women (66% vs. 53%).
Nearly eight in ten (79%) consumers say that gas prices impact their feelings about the economy. Higher gas prices may affect consumer spending, beginning with travel. The percentage of consumers who say that they will drive more over the next 30 days fell from 24% to 20%. However younger consumers, ages 18-34, are still likely to drive more over the next 30 days, with one in three (33%) indicating so.
Consumers are divided whether they will spend more over the next 30 days. One in six (16%) consumers say that they will spend more on consumer goods over the next 30 days, unchanged from the month prior when gas prices bottomed out. Meanwhile, 19% say that they will spend less.
What will consumers do if gas prices continue to climb? The prolonged period of lower gas prices may have changed consumers’ perceptions about what they consider to be “high prices.” Consumers say that a gas price of $3.50 per gallon would be the level that they would consider reducing the amount that they drive. Nationwide, gas prices averaged $3.50 per gallon as recently as August 2014.
“Consumers remain upbeat about the economy, but there are some concerns for retailers over the coming months and gas prices will likely play a central role,” said Jeff Lenard, NACS’ vice president of strategic initiatives. “The recent increase in prices is clearly affecting consumer sentiment even though gas prices are now equal to what they were a month ago.”
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 NACS survey was conducted by Penn, Schoen and Berland Associates LLC; 1,102 gas consumers were surveyed Feb. 6-8, 2015.