Consumer Spending Could Be Out of Gas
Wal-Mart worker Jean Sartore sees the effect of rising gas prices on the sales floor at work and when she gets in her 1996 Buick Park Avenue. With local gas prices at $3.27 on May 16, filling her car costs about $75—a day’s pay at Sartore’s Wal-Mart Supercenter in Henderson, Ky. At work, Sartore says the gift and toy departments she oversees now get fewer shoppers.
In the face of stagnating wages, an ongoing housing market decline, and ballooning household debt, consumers have been the stalwarts of the U.S. economy. But as gas prices approach historic highs, lower-income consumers are finally slowing down, watching both their wallets and how much they drive.
Rising steadily for three months, gas prices hit a nationwide average of $3.10 per gallon on May 16—a historic record, and 2 cents shy of the inflation-adjusted high of $3.12 reached in 1981.
With the Energy Dept. data showing that gasoline demand is starting to abate, and April retail sales more sluggish than expected, there’s concern for the broader economy if U.S. consumers turn thriftier.
Photo by MSDesigns.
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