AAA Expects Declining Pump Prices to Help Labor Day Travel (Infographic)
Consumers paying lowest early-August gas prices since 2010
ORLANDO, Fla. -- AAA Travel projects that 34.7 million Americans will journey 50 miles or more from home during the Labor Day holiday weekend, the highest volume for the holiday since 2008 and a 1.3% increase over 2013. Nearly 86% of travelers (29.7 million) will celebrate the holiday with a road trip.
The Labor Day holiday travel period is defined as Thursday, Aug. 28, through Monday, Sept. 1.
"As the economy makes modest gains, more Americans are joining the labor force this year," said AAA Chief Operating Officer Marshall L. Doney. "With Labor Day symbolizing the American workers' contributions to the strength and prosperity of our country, it's only fitting that millions are choosing to celebrate this positive direction with an all-American road trip."
Consumer spending is continuing to rise in spite of stagnant income growth. In the third quarter of this year spending is expected to increase 3.8% year-over-year, while disposable personal income is only expected to increase 1.4%. Reliance on credit cards, rather than increasing income, is fueling holiday travel spending this year. While economic growth is slow, consumers are feeling more comfortable taking on debt.
"This year, Americans are more optimistic about their financial situation," Doney said. "Consumer spending continues to outpace disposable income, indicating that Americans are comfortable using their credit cards."
Most U.S. consumers are paying the lowest gas prices for early August since 2010. AAA said it expects gas prices to have little impact on the number of people traveling for Labor Day, though lower prices could help make travel more affordable. Barring a major development, such as a Gulf Coast hurricane, prices are likely to remain relatively low leading up to the holiday weekend compared to recent years, which will allow travelers to allocate more of their budgets towards travel expenses. The current price of gas is $3.44 compared to $3.59 on Labor Day last year.
Click here to read the full 2014 Labor Day Travel Forecast Report.