Money Matters: Lower gas prices not ramping up consumer spending
Gas prices are slightly lower this year, but that's not leading to a large pick-up in consumer spending, according to a survey by Bankrate.com."Even with a recent seven percent pullback in gas prices, I think a lot of consumers would consider gas prices to still be relatively high," said Greg McBride, Bankrate.com Senior Financial Analyst.McBride said high gas prices hurt the economy more than lower prices are helping it."In each of the past two years, 60 percent of Americans said they cut back on their discretionary spending because of rising gas prices," McBride said. "Only about one in six Americans said they had in fact increased their spending." McBride said one reason for this is that budgets are still tight. "A lot of people haven't seen a raise, their incomes are stagnant, yet other household expenses continue to rise," McBride said. Previous Bankrate.com studies revealed certain households are hit harder. "Now in years past when gas prices have been on the rise and people have been quick to cut back spending, we found this to be particularly pronounced, among others, consumers in rural communities. Those that have longer commutes and tend to be more impacted by higher gas prices," McBride said. However, this latest study found consumers are cutting back across the board. "It's consistent across age, income and even educational attainment," McBride said. McBride said there is a valuable take-away from the study. "Even a modest decline in gas prices just doesn't put enough wind in their sails that they can go and ramp up spending to the extent that it can kick the economy into a higher gear," McBride Said.