Economic optimism is expected to drive consumers to travel more and spend more as a result.
The results of a new consumer survey from the National Association of Convenience Stores (NACS) have revealed that 50% of all Americans are reporting that they are optimistic about the economy. This is the highest percentage of Americans reporting economic optimism since November 2015, and it is a six-point jump from last month.
Two in three consumers (67%) ages 18-34 say that they are optimistic about the economy, a huge 15-point increase from a month ago. Fuel consumers in the Northeast (56% optimistic) and Midwest (54%) are more upbeat about the economy’s prospects than fuel consumers in the South (47%) and West (47%).
The sustained period of lower gas prices appears to finally be driving economic optimism higher. More than four in five consumers (83%) ages 18-34 say that gas prices affect their optimism. Higher optimism may also be contributing to an increase in driving: nearly one in four Americans (23%) say that they will drive more this month, compared to only 16% in March 2015 who said they would drive more over the next month.
While consumers say they are much more optimistic about the economy, they also report a small uptick in gas prices. U.S. fuel consumers reported seeing a median gas price of $1.80 per gallon, a one-cent increase from the February 2016 median of $1.79. This increase, however small, represents the first time consumers have reported a price increase of any size since June 2015.
One in three (34%) U.S. fuel consumers say gas prices have increased in their area in the past month, compared to 68% who noticed gas prices increasing in March 2015. There are significant regional differences; just 16% of fuel consumers in the Northeast report increased prices, while a majority (53%) of Midwesterners have seen higher prices at the pump this month.
When asked about gas prices 30 days in the future, a majority (53%) of U.S. fuel consumers say they expect gas prices to rise, while just one in eight (12%) are expecting prices to drop over the next month. This is the highest percentage of U.S. fuel consumers expecting higher prices since July 2015, when 54% expected increases in gas prices. However, it is still significantly fewer than in March 2015 when three in four drivers (73%) said they thought gas prices would increase.
Even with the slight increase in gas prices, miles per dollar — a calculation that examines gas prices related to vehicle fuel efficiency — hit a new high of 13.22 miles per dollar in March.
“There is a lot of good news for retailers in these results. People feel better about the economy and want to travel more. The key is whether they also will want to spend more and the results right now are mixed, with only 19% of Americans saying that they will spend more this month — the same level as in March 2015. Convenience retailers are optimistic that the increase in consumer sentiment and warmer weather will help grow sales at stores,” said Jeff Lenard, NACS vice president of strategic industry initiatives.