Are Gas Prices Pumping Up Consumer Spending?

I’ve never fancied myself as a DJ Scream fan, but when he rips into his anthem ballad, “How low can you go, how low can you go”, how can any of us not get down with the total awesomeness we see every day at the gas pumps, as prices plummet all over the United States?

AAA’s recently released (1/19/15) “Gas Gauge” quotes the average price per gallon at $2.13.  Now that is a fountain of awesomeness! $30.00 to fill most U.S. gas tanks.  Ha, “take that” hybrid fanatics and electric car aficionados.

And what to do, oh what to do, with all the extra money I will save.  In some cases Americans are reporting a monthly estimated savings of $250.00.  So, do Americans re-fuel the stagnate economy, put more away for retirement and college, or put 93 octane into their car’s stomach for the first time since we engaged in Desert Storm 1?

Ipsos Public Affairs’ recent study “Saving with lower gas prices” shows some interesting trends with U.S. consumers, and how their behaviors have changed with the downward sliding gas price crisis (obviously joking about it being a crisis).  The results of our eNation Online Omnibus study conducted in January 2015 shows that overall, one-third (36%) felt they were able to spend more money for the holidays because gas prices were so low.  Households with children (53%) and Millennials (51%), with over half of those groups indicating they had extra money to spend this past holiday season.  Those that were least likely to say gas prices affected their holiday budgets were females (32%), households without children (30%), and most of all, those over 55 years of age (21%).

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Okay, so before Wal*Mart stands up to high five Sunoco, what exactly are these consumers doing with their new found pile of Benjamins? Well here is a quick hit list of where the almighty dollar went, once it detoured its way out of the gas tank.  At least one in four used the money for the following; food/groceries (52%), paying bills (48%), putting in savings (32%), and going out socially or to dinner (26%).

I say bravo to Johnny and Sally Q. Public.  Some smart moves, some economy saving pump moves, and some wanton spending.  At least it all didn’t go into our next fantasy cruise through the Caribbean.

If there is one thing for certain, every American will keep their eye on the pumps as much as the blue light specials at retailers this winter.  I can’t say this new found discretionary income will help me travel to Tibet (my lifelong dream), but it certainly has enabled me to funnel more money into savings and out of my Venza this past month.