The Washington brouhaha over the fiscal cliff that hung over the nation like a black cloud at the end of 2012 was largely blamed for consumer pessimism measured at that time, and now the Washington battle over the continuing resolution and the debt ceiling is getting similar blame, trumping the power of lower fuel prices to build optimism.
According to the National Association of Convenience Stores, lower fuel prices almost always coincide with increased consumer optimism, but not this time – in fact, it’s the second month in a row that prices have decreased and pessimism increased. The results are from the NACS Consumer Fuels Survey.
The price of gas is 22 cents per gallon cheaper than it was a month ago on average, but 65% of consumers are now pessimistic about the economy.
And sure enough – 46% say the government shutdown is the reason for their negativity, compared to only 16% who say it has no impact on their feelings one way of the other.
“We know that gas prices play an enormous role in overall consumer sentiment; however, this influence can be overshadowed by significant world or national events,” said NACS Vice President of Government Relations John Eichberger.
The overall pessimism flies in the face of unusual confidence in the stability of gas prices. Only 45% believe they will move back up over the next month, the first time all year that the number has been lower than 50%.
Eichberger sees a silver lining in the results. “Of course, world and national events will ultimately determine oil and gas prices over the next month. But the fact that consumers are not dreading future prices is a positive indicator about the economy in general,” he said.
RBR-TVBR observation: The new crisis model of governance seems to take a toll on the economy in general. Perhaps the day will come when the members of Congress once again perform their duties like adults, but we aren’t holding our breath.