The latest Consumer Fuels Survey results released by the National Association of Convenience Stores (NACS) has revealed that consumers are currently more optimistic about the economy and plan to increase their driving this month. However, even as prices fall from the seasonal high, consumers don’t expect gas prices to fall below $2 per gallon.
Nearly two in five Americans (39%) say that gas prices are lower than they were this time last month, but there are sharp regional variations. Two in five drivers in the Northeast (43%) and Midwest (44%) reported lower prices, more than double the percentage reporting lower prices in the West (21%). Nationwide, the median reported gas price is $2.64, a 15-cent drop from last month’s median.
The decrease in gas prices has led to increased economic optimism. One in two consumers (49%) are optimistic about the economy, a two-point increase from last month. More than three in four consumers (77%) say that gas prices affect their feelings about the economy.
A combination of vacations and lower gas prices will lead many Americans to step up their driving in August. One in three (34%) say they will drive more over the coming 30 days, while only 8% say they will drive less.
Many consumers think gas prices will continue to fall, with one in four consumers (25%) expecting gas prices to decrease over the next 30 days (up from just 10% who thought so last month). However, most consumers are skeptical that prices will eventually drop below $2 a gallon. Only one in five consumers (20%) think that gas prices are likely to fall under $2 per gallon in the next few months. A majority of U.S. fuel consumers (51%) say sub-$2 gas is “very unlikely,” including 72% of fuel consumers in the West.
If gas prices were to fall below the $2 per gallon threshold, however, consumers say that it would have a very significant impact on their driving and spending behavior. One in three drivers (32%) say that $2 per gallon gasoline would have a “great impact” on their personal financial situation, including 43% of consumers from households with incomes under $35,000 per year. Two in five consumers (40%) say that they would likely spend more on items other than gas if gas prices fell below $2 per gallon. A similar percentage (41%) say they would drive more frequently if gas prices fell below $2 per gallon.
“There is good news for retailers as consumer optimism picks up during peak vacation season. It could be a good month for anyone serving vacationers, including convenience stores,” said Jeff Lenard, NACS vice president of Strategic Industry Initiatives.
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 online by Penn Schoen Berland; 1,100 gas consumers were surveyed Aug. 4-6, 2015.