The takeaway point, according Bankrate, which issued a press release on the numbers, is that high gas prices hurt the economy far more than lower gas prices help.
Some of that apparent paranoia may be attributed to the fact that, while prices are down from their $4-plus average from last spring, there have been a couple "S" curves worth of fluctuations. Average gas prices tumbled to about $3.45 a gallon last July, rose about 40 cents by September, dropped again to about $3.30 around the new year and have since settled at about $3.60 a gallon, according to AAA. See Bankrate's press release below.
NEW YORK – May 20, 2013 – Bankrate.com (NYSE: RATE) found that 80% of Americans have not increased their discretionary spending despite gasoline price declines in the first half of 2013. Last year, elevated gas prices led 59% of Americans to decrease their non-essential spending. In 2011, when gas prices were also at elevated levels, 63% of Americans cut back.
Between late February and late April 2013, gas prices in many parts of the U.S. dropped by 30 cents per gallon (nearly seven percent). Currently, gas costs about 25 cents per gallon less than it did one year ago. But as Greg McBride, CFA (Bankrate.com's senior financial analyst) explains, "While rising gasoline prices are a clear headwind to the economy, recent price declines have provided little oomph to the economic recovery."
Only 17% of Americans have increased their non-essential spending as a result of the recent drop in gas prices. The reading is consistent across age, education and income levels.
Bankrate.com's Financial Security Index slipped for a second consecutive month in May, to 100.2, but continues to show slight improvement versus this time last year. Any reading above 100 indicates improved financial security compared to 12 months ago. This is the third month in a row – but only the fifth in the 30 months since its inception – that the Index has registered over 100.
Americans are feeling better now than in May 2012 in four of the Index's five components (job security, debt, net worth and overall financial situation). The other component, savings, remains in negative territory. Interestingly, higher-income households (annual income of $75,000 and up) are the only group feeling more comfortable with their savings versus last year but are feeling slightly negative about their job security in that same time period.
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:
PSRAI obtained telephone interviews with a nationally representative sample of 1,001 adults living in the continental United States. Interviews were conducted by landline (501) and cell phone (500, including 235 without a landline phone) in English by Princeton Data Source from May 2-5, 2013. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.
About Bankrate, Inc.
Bankrate is a leading publisher, aggregator, and distributor of personal finance content on the Internet. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, our flagship website, and other owned and operated personal finance websites, including CreditCards.com, Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, Nationwide Card Services, InsuranceQuotes.com, CarInsuranceQuotes.com, InsureMe, Bankrate.com.cn, CreditCards.ca, NetQuote.com, and CD.com. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of nearly 600 local markets in all 50 U.S. states, Bankrate generates over 172,000 distinct rate tables capturing on average over three million pieces of information daily. Bankrate develops and provides web services to over 80 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, AOL, CNBC, and Bloomberg. In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe.