Consumer Optimism Jumps as Gas Prices Drop
September survey shows 8-point leap after August low
ALEXANDRIA, Va. -- From pessimistic to optimistic, consumers' feelings about the economy are as volatile as the price of a barrel of crude. That's the takeaway from the latest NACS Consumer Fuels Survey, which shows 47% of participants optimistic about the direction of the economy, the highest level in 14 months. It is also eight points higher than in August, where the survey recorded a 10-month low in optimism.
The most optimistic consumers? Those between the ages of 18 and 34 (56%) and living in the Western United States (51%), according to the National Association of Convenience Stores.
That eight-point jump in optimism between August and September was the largest NACS has recorded since it began conducting the monthly survey in Jan. 2013 to track how gas prices impact consumer sentiment.
The great majority of consumers polled in September said that gas prices have "some" or "great" impact on their feelings about the economy, as average gas prices nationwide have fallen 20 cents per gallon (CPG) within the last two months. Jeff Lenard, NACS vice president of strategic industry initiatives, noted that this change in optimism is playing out against chaotic world events.
"We have seen increasingly wide swings in economic mood over the past three months as consumers continue to sort out how world and national events could affect their economic security," said Lenard. "At the same time, it appears that what happens at the corner store with gas prices continues to play a major role with consumer sentiment."
While consumers may be more optimistic, they aren't necessarily more likely to open up their pocket books. In a new question for the survey, NACS asked consumers if they would be able to spend more or less over the coming month. According to the September survey, although 22% of consumers said they would spend more, an equal share said they would spend less. The younger consumers seem more in a spending mood, with 38% of those between 18 and 34 years old expecting to spend more, vs. only 12% of those 50 years and older.
Meanwhile, consumers seem roughly split about which direction gas prices may move in the next 30 days; 45% anticipate "much" or "somewhat higher" prices, while 44% think prices will stay about the same. Only 11% expect them to fall.
Consumers also appear to believe that they are getting more bang for their buck, with the miles per dollar—which attempts to measure perceive value—up by 16 CPG to reach 6.8 miles per dollar, the highest level since March 2014.
The September NACS Consumer Fuel Survey was conducted by Penn, Schoen and Berland among 1,110 gas consumers on Sept. 3 and 4, 2014.