If you have to put your hard earned cash into your vehicle’s gas tank, you can’t spend it on a vacation, or dining out. A new study finds that consumers are holding back on non-essential spending in the face of high gasoline prices.
The study comes from Bankrate.com in association with Princeton Survey Research Associates International.
“The sensitivity to gasoline prices voiced by Americans cuts both ways. Any sustained pullback in prices would be a boost to the economy, but a renewed increase in gas prices would be a further drag on growth,” said Greg McBride, CFA, senior financial analyst for Bankrate.com.
The gas price hikes are affecting lower- and fixed-income households the most. Bankrate says 72% of those who say it’s affecting their spending patterns earn less than $50K annually, and 66% are retirees and rural residents.
Bankrate notes that Americans sense of overall financial security improved from April. Its Financial Security Index rose from 93.5 to 98.5.
18% are experiencing more anxiety about their job than they did a year ago, but that is also an improved number – it stood at 25% in April.
Bankrate is finding mixed signals, however. 27% say their financial security has improved over the past year – mostly in the $75K-and-higher earning bracket. On the other hand, 28% say financial security is worse, mostly in the $50K-and-lower earning bracket.
RBR-TVBR observation: Other studies we’ve seen indicate that at the very least, those who have had a job for awhile are confident about the prospects for its continued existence. And they may still want to get away for awhile this summer.
However, maybe this isn’t the summer that many will finally take that cross-country trip they’ve been dreaming about. What they may opt for instead is a week away at a vacation destination that is within fairly easy driving distance to keep fuel expenses under control.
If we a business reliant on the tourist trade, we’d draw a driving-distance circle around our location and start advertising in the population centers within the circle. And if we were a broadcast station that falls in that circle, we’d be courting business from businesses at the destination.
Hey, if high gasoline prices are the lemons, this strategy will hopefully produce the lemonade.