Fresh data shows that more Americans will be hitting the road this year than last, with 34.8 million travelers going at least 50 miles from their homes this weekend.
Granted, that’s not exactly loading the kids in the car in Waukesha and taking the Winnebago to Disney World, but at least high, year-long gas prices haven’t taken consumers off the roadways yet.
“The overall domestic economic picture continues to improve slightly, however, American consumers faced a new challenge this year as steadily increasing gas prices throughout the spring significantly squeezed many household budgets,” AAA CEO Robert L. Darbelnet said in a statement. “Americans will still travel during the Memorial Day holiday weekend but, many will compensate for reduced travel budgets by staying closer to home and cutting entertainment dollars.”
Cars, trucks and minivans promise to be the go-to choice for travel this week. The AAA says that 30.7 million Americans will travel by auto this weekend, that’s up 1.2% from the same period in 2011.
Apparently, U.S. consumers aren’t letting high gas prices get in the way of their Memorial Day recreational plans. Fifty-three percent of consumers surveyed by AAA said “recent increases in gas prices” wouldn’t crimp their travel plans.
Of the remaining 47%, about two-thirds say they’ll cut back in other areas to accommodate higher gas prices, which peaked in April. Price declines in gasoline occured in 23 of 30 days last month. But in February and March combined, consumers saw price reductions at the pump on just four days.
What accounts for the decline in gas prices? Primarily, stronger economic news across the board in April. Consumer spending was up, employment was up (albeit moderately), and the mild winter across the U.S. allowed consumers to have more money to spend on consumer goods, thus boosting the economy overall.
When fewer consumers are spending, oil companies have to keep prices higher to make a profit. As more consumers buy gasoline, costs are curtailed as gasoline inventories are reduced, a highly positive outcome for oil companies.
There’s a decent chance that lower prices at the pump may not continue in June. Economic indicators already out in May, like the Philadelphia Federal Reserve Business Outlook Survey, which shows negative growth in regional manufacturing, are pointing toward a slowing U.S. economy.
So get in on lower gas price while the getting in is good. There’s no guarantee that the gas prices you see in June will be as appealing as the prices you see in May.