This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

High Gas Prices Hurt Economy More Than Lower Gas Prices Help

NEW YORK, May 20, 2013 /PRNewswire/ --  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.

(Logo: http://photos.prnewswire.com/prnh/20040122/FLTHLOGO )

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:

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,070.57 -9.57 -0.05%
S&P 500 2,112.30 -5.39 -0.25%
NASDAQ 5,069.0980 -22.9870 -0.45%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs