Pump squeeze
Consumers spending less on gas as prices rise
AMERICANS ARE AVOIDING the pain of higher gas prices by simply avoiding the pump.
In the past year, gasoline consumption has fallen 3% from the year before, according to Mastercard Advisors Spendingpulse.
Demand has fallen year-over-year for 52 straight weeks, Spendingpulse said. Consumers haven’t cut back for that long since prices spiked four years a go during the recent recession.
Gas prices have risen almost 10% nationally in the past year, climbing to a 10-month high of nearly $3.89 on Friday, Aaasaid. Newyork City prices hit $4.11.
Higher oil prices, hoisted by tensions over Iran’s nuclear plans, and strong global fuel demand have been driving the gains.
While Americans are getting more thrifty with their gas-buying, some economists worry prices will bite into consumer spending, crimping the economic recovery.
“This is the most significant threat to the recovery at this point,” said Moody’s Analytics chief economist Markzandi.
High gas prices are also becoming an issue inthe election. Wrappingupa two-day pitch of his energy policies, President Obama on Friday announced an expedited review of AU.S. oil pipeline, but cautioned that “producing more oil at home isn’t enough by itself to bring gas prices down.”
A poll last week by AAA showed about 60% of drivers cut gas costs by combining errands, while 16% bought or leased a more fuel-efficient vehicle.