Rising fuel prices seem to have little effect on current consumer optimism.
Over the past month fuel prices have risen 10-cents per gallon, but a recent consumer survey from the National Association of Convenience Stores (NACS) suggests that this price increase has failed to decrease consumer optimism concerning the overall state of the economy.
U.S. fuel consumers quickly noticed this month’s price increase. About two in five (43%) U.S. fuel consumers say that gas prices rose in their area in the last 30 days. Just last month (August 2016), roughly the same number (42%) said they had noticed prices at the pump declining. Although consumers across the nation noticed a gas price rise this month, there are regional differences. For example, fuel consumers in the South (48%) were more likely to notice an increase in the price of gas as compared to fuel consumers in the Midwest (43%).
Even though many customers noticed the gas price increases, their economic mood remained largely unchanged, increasing one percentage point to 45% optimistic. There were strong regional variations in the latest survey results, with consumers in the West much more likely to be optimistic (49%) compared to consumers in the Northeast (40%). Consumers in the Northeast also were the most likely to say that gas prices will increase over the next 30 days (51% in the Northeast versus 45% in the rest of the country).
There were other variations across demographics. For the first time since the monthly surveys were launched in January 2013, younger consumers―those ages 18-34―are the least optimistic age group, with 42% expressing optimism about the economy. Also, women have been generally less optimistic about the economy than men, but were slightly more optimistic in September (45% versus 44%).
“From 2013 to 2015, gas price increases have almost always led to declines in optimism―and vice versa, but we have only seen that dynamic in three of the nine months this year. The extended period of low gas prices and the sustained negative political campaign probably both play a role in this change,” said Jeff Lenard, NACS vice president of strategic industry initiatives.
Consumers say their vehicle’s average fuel efficiency dropped to 23.6 miles per gallon, which is about 2.5% lower than self-reported mileage a year ago. Average miles per dollar―a calculation that examines gas prices related to vehicle fuel efficiency―dipped to 10.7 miles per dollar as gas prices rose and fuel efficiency declined.
Despite the uptick in gas prices, they are still 19 cents lower than last September, when consumers reported a median gas price of $2.39 per gallon.
NACS, which represents the convenience store industry that sells 80% of the gas in the U.S., conducts monthly consumer surveys to gauge how gas prices affect broader economic trends. The survey was conducted online by Penn Schoen Berland; 1,100 U.S. adults who purchase fuel for a vehicle such as a car, truck or van at least once per month were surveyed September 6-9, 2016. Summary results are available at nacsonline.com/fuelssurvey.