Customers who—thanks to lower gas prices—find themselves with extra cash on hand are expected to put that money toward holiday gifts.
Two in three gasoline customers report that gas prices in their area are lower than they were last month, and the continued drop in prices could spur last-minute shopping at stores over the holiday season, according to the latest Consumer Fuels Survey results released by the National Association of Convenience Stores (NACS).
According to the survey, 66% of gasoline consumers across the U.S. say gas prices are lower than they were 30 days ago.
More than one in four consumers (27%) say that they will increase their spending this month, an increase from the 24% who said so a year ago in December 2014. More encouraging are the spending plans of those ages 18-34; two in five (40%) Millennials say that they will increase their spending this month, an increase from 33% in December 2014. Younger consumers also will be driving more: 39% say they will be driving more this month than last month, significantly higher than the 22% of Americans overall who expect to drive more this month.
While consumers are still noticing that gas is getting cheaper, Americans remain split on their feelings towards the economy. In December 2015, 48% of Americans reported feeling “somewhat optimistic” or “very optimistic” about the economy, down slightly from the 50% who said the same in the previous month’s survey. For the second straight month — and only the second time in three years — men are more optimistic than women, with a majority (52%) expressing optimism. Younger consumers remain the most optimistic, with three in five (60%) expressing optimism.
Nationally, consumers report a median gas price of $2, 20 cents lower than last month and 70 cents lower than they were in December 2014.
Looking forward, consumers continue to grow more confident that gas prices will stay low over the next month. Only one in three fuel consumers (32%) say that they expect prices to be higher in thirty days, the lowest number that have predicted increased prices since January. Consumers from the Midwest are the most apprehensive about future gasoline prices, with nearly four in 10 (38%) saying that they expect prices to be higher next month.
“The rise or fall of gas prices is one of the best predictors of overall economic optimism — 71% of Americans said gas prices affect their feelings about the economy — but the link has been much weaker the past few months,” said Jeff Lenard, NACS vice president of strategic industry initiatives. “The current political climate may play a role — the last time we saw a similarly weak link was in October 2013 with the federal government shutdown.”
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; 1,104 gas consumers nationally were surveyed Dec. 8-11, 2015.