Fuel Prices Don't Shake Consumers' Optimism
Despite expectations of high gas prices, nearly half still feeling good about economy
ALEXANDRIA, Va. -- Even in the face of a spike in gasoline prices during the past month, consumers still feel optimistic about the economy, despite their expectations that prices will continue to climb over the next 30 days. That's the latest results from the National Association of Convenience Stores' monthly NACS Consumer Fuels Survey that gauges the impact of gas prices on consumer sentiment.
In the March survey, 85% of consumers said that gas prices affected their sentiment; 68% noticed that gas prices rose over the past month, while 22% described prices as "much higher." Nearly 60% of consumers expect prices to rise during the next 30 days--the highest percentage to expect higher prices since July 2013; 12% expected prices to be "much higher."
When asked at what price gas would need to hit before they would try to reduce how much they drive, the mean response was $4.09 per gallon, steadily inching up from a low of $3.93 per gallon in December 2013.
According to the survey, 68% of consumers said they expected to drive about the same amount as in the past 30 days, with 20% expecting to drive somewhat or a lot more.
But despite higher gas prices and expectations for continued increases, 44% of consumers said they were optimistic about the economy. This is a veritable leap from the 35% of consumers who were optimistic in Oct. 2013, at a time when consumer sentiment had bottomed out.
Consumers in the West were the most optimistic about the economy, with 47% expecting improved conditions, while those in the Northeast--who are recovering from a brutal winter--had the lowest level of optimism at 39%.
In the February Consumer Fuels Survey, NACS reported that younger consumers seemed to be especially optimistic, with 17% of those between the ages of 18 and 34 saying that they were very optimistic vs. 4% of those older than 50.
Meanwhile, consumers' miles per dollar dropped 3.9% in March to hit 6.92 miles per dollar. This is a new metric added by NACS in 2014 to determine how consumer perceptions about their self-reported mileage and gas prices could also affect their moods.
"The latest increase in consumer optimism is great news for convenience stores and other retailers who saw slim sales as the harsh winter weather in early 2014 kept consumer spending in check," said NACS vice president of government relations John Eichberger. "That fact that consumer optimism continues to increase while every other metric that we track related to consumer optimism trended down is a positive indicator for retailers, who typically see stronger sales inside the store as the weather heats up and daylight hours increase."
NACS conducts a nationwide survey with Penn, Schoen & Berland Associates LLC to measure consumer perceptions about gas prices and how they relate to economic conditions. For March, it surveyed 1,089 gas consumers from March 4-6, 2014. The margin of error for the entire sample is +/-2.86 at the 95% confidence interval and higher for subgroups. The OPIS weekly national average price for gas was $3.452 on March 3, the week in which the survey was fielded.