The impact of gas prices on consumer confidence

Earlier this week, Gallup released statistics that show we are suddenly optimistic about gas prices. In fact, last month, nearly 9 in 10 Americans said gas prices in their local areas would be even higher by the end of the year; now, that percentage has dropped by more than half. Our sunny outlook is probably due to the fact that the price at the pump has been going down. Last month, the average price for a gallon of gas was $4.09; today’s average is $3.74 .

According to another survey by Gallup, there has been a very high correlation between overall economic mood and the average price of regular gas this year. According to the most recent Gallup consumer confidence poll, falling gas prices have made us slightly more optimistic about the economy. While most (70 percent) still have a pessimistic view of the general economy, there has been a mood lightening from the July survey when 83 percent of the respondents indicated negative views of the economy.

I know that the price of gas is very, very important. Yet I wonder if the 35 cents per gallon is enough to make us feel better. If you suspect there are other factors at play, please share your thoughts through the comments section.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.