Easing Gas Prices Boost Consumer Sentiment for July Fourth

Gas prices heading into the Fourth of July weekend are the highest they’ve been in four years but lower than recent highs, AAA said in a Thursday (July 2) press release. Thursday’s national average was $3.838, which was up from $3.172 a year ago but down from $3.918 a week ago and $4.290 a month ago, according to AAA’s fuel prices page. This spring’s gas prices peaked at $4.56 on May 12. Compared to past Fourth of July weekends, this year’s figure is the highest since 2022. “Overall, gas prices remain the highest they’ve been in four years, but the downward trend since late May is welcome news during the busy summer driving season,” AAA said in the release. AAA projected in June that a record-high number of 72.2 million Americans would travel at least 50 miles from home for Independence Day between June 27 and Sunday (July 5). That figure would be up from last year’s record-setting total of 71.8 million. The organization said 61.4 million of these travelers would go by car, up from 61.3 million last year, because even with higher gas prices, traveling by car is still cheaper for many than purchasing a flight. The University of Michigan’s Surveys of Consumers found that lower gas prices boosted consumer sentiment at the end of June. “Consumer sentiment confirmed its early-month reading, rising about 10% above May as gas prices moderated,” Surveys of Consumers Director Joanne Hsu said when announcing the survey’s final results for June. “Increases were seen across income, wealth and political affiliation.” The Surveys of Consumers’ Index of Consumer Sentiment dropped to a record low in May, driven by gas prices worries and concerns related to the war in the Middle East. The reading was the lowest seen in the over 73-year history of the Index. Consumer sentiment began to tick up as gas prices eased in early June. The Conference Board said June 30 that consumer confidence improved slightly in June, with consumers’ write-in responses to the organization’s survey having less frequent, but still elevated, references to prices and oil and gas. “Consumer confidence inches up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” The Conference Board Chief Economist Dana M Peterson said in a press release. Bloomberg reported Friday (July 3) that consumers are especially aware of movements in gas prices. Laurel Harbridge-Yong, a political science professor at Northwestern University, said in the report: “When you think about your grocery bill, it’s maybe slowly inching up, but you don’t have the same visceral reaction that you do of, ‘Wow, a month ago I could fill my tank for $40 and now it’s $60.’”