A majority of Americans say lower gas prices are making a big difference in their finances but they aren’t bolstering the economy as some had predicted, a new survey shows.
The Gallup poll found that 57% of U.S. adults believe cheap gas is making a noticeable difference, including 27% who described the impact as “big.’’
Thirty percent said low prices are making “some difference,’’ 25% said they making “a little difference’’ and 17% said they are making “no difference.’’
Gas prices are about $1 per gallon less than a year ago thanks to oversupply, increased efficiency in oil production and Saudi Arabia’s willingness to allow lower than usual prices.
After years of gas prices exceeding $3 per gallon, the average price nationwide has been less than $3 since November. Prices dipped below $2 per gallon early this year in many areas but lately have been rising.
The savings have pumped money into Americans’ pockets, but not necessarily the economy. When asked what they are doing with the extra money from reduced gas prices, the most common response was “paying down bills.”
About 42% of survey respondents said the money is going toward bills compared with 28% who said they are saving the money and 24% who are spending it.
While paying off bills is a form of spending, it’s not the kind that helps the economy because it covers purchases that were already included in the gross domestic product.
Sluggish spending in the first few months of the year further underscores that lower gas prices aren’t contributing to more spending on goods and services.
The poll results shouldn’t come as a surprise. When President George W. Bush gave U.S. taxpayers a rebate in 2001, more Americans said they planned to pay bills than save or spend the money.
In addition, as oil prices stabilize, some economists predict that Americans will start to expect that they have more disposable income so it won’t seem like savings from low gas prices are extra money.
Results of the Gallup poll were based on telephone interviews conducted June 2-7 with 1,527 randomly sampled U.S. adults in all 50 states and the District of Columbia. The margin of sampling error was plus or minus 3 percentage points.
