Gas Price Drop a Good Sign for Summer Months
Memorial Day is approaching and that typically means gas prices have spiked
at pumps across the nation. That would be true in a typical year, but 2011
is anything but, and prices have come down in recent weeks following increases
that had consumers shelling out around $4 a gallon.
Prices have dropped nearly four percent since gas hit its highest level for
the year ($3.985) on May 4, according to MasterCard Advisors.
“Higher prices were the function of a speculative bubble, well beyond
any sort of fundamental justification,” Stephen Schork, president of The
Schork Group Inc., told Bloomberg News. “The market is correcting
The prospect of lower gas prices has economists cautiously optimistic that
consumers will continue to spend during the summer months.
“When the price of gasoline falls, people feel better,” Chris G.
Christopher Jr., a senior economist with IHS Global Insight, told The Boston
Globe. “Maybe they’ll spend a bit more or have a nicer vacation because
Phil Flynn, an oil analyst with PFGBest, told the Globe, “I think
retailers are going to be vying to get people into their gas stations. It’s
going to be very competitive.’
AAA expects nearly 35 million American will travel 50 or more miles away from
their homes this weekend for some sort of Memorial Day activity. That’s about
100,000 more than did the same last year.
“Memorial Day travel experienced a gain of more than 14 percent in 2010,
and this year we expect to add slightly to that gain due to an increase in
air travel and an improvement in the overall domestic economic picture,” said
Robert Darbelnet, president and CEO of AAA, in a press release.
In a AAA survey, six out of ten said rising gasoline prices would not affect
their travel plans for the holiday. Of the remaining four, 70 percent of those
said they would economize in other areas to compensate and 30 percent said
they would either take a shorter trip or travel by alternate transportation.
- Gas Prices Not Expected to Keep Americans Home Memorial Day Weekend, AAA
says – AAA
- Gas Poised to Decline as $4 Drives Down Demand: Energy Markets – Bloomberg
- Staycations? Not this holiday — gas prices are down – The Boston Globe
- How gas prices will affect Memorial Day weekend spending – The Philadelphia
Discussion Question: Do you expect consumers to respond positively to lower prices at the pump although the cost of filling up is still much higher than last year at this point?