Consumer Pessimism Deepens Even as Gas Prices Dip
National events overshadow local declines, says NACS
ALEXANDRIA, Va. -- Consumer pessimism continues to deepen despite a second straight month of gasoline price declines. Nearly one in four consumers (23%) say that they are "very pessimistic" about the economy, tied for the highest level measured this year, according the latest monthly NACS Consumer Fuels Survey. This is also the fourth month in row of increasing consumer pessimism about the economy.
Overall, 65% of consumers say that they are pessimistic about the economy, despite a 22-cent drop in gasoline prices over the past month. This marks the second straight month that pessimism increased despite a drop in gasoline prices, reversing a trend that had held for the first eight months of the year when pessimism increased only when gasoline prices increased.
National events, as opposed to fuel prices at the corner store, seem to be the factor driving the pessimism. The U.S. government shutdown certainly is on the mind of consumers. Nearly half of consumers (46%) say that the government shutdown has a "great impact" on their feelings about the economy; only 16% say that the shutdown has little or no impact on their views about the economy. A comparatively small 36% of consumers say that gasoline prices have a "great impact" on their feelings about the economy.
"We know that gas prices play an enormous role in overall consumer sentiment; however, this influence can be overshadowed by significant world or national events," said NACS vice president of government relations John Eichberger.
While overall pessimism remains high, consumers are optimistic that gasoline prices will continue their downward trend; for the first time this year, less than half of consumers (45%) say that gasoline prices will be higher next month.
"Of course, world and national events will ultimately determine oil and gas prices over the next month. But the fact that consumers are not dreading future prices is a positive indicator about the economy in general," said Eichberger.
Consumers certainly have appreciated the growth of convenience stores: 74% of consumers surveyed say that they benefit from convenience stores selling gasoline, 66% say that self-service fueling has helped lower the price of gasoline and 53% say that having more businesses sell fuel has increased competition and helped lower gasoline prices.