Easing Gas Prices Boost Consumer Sentiment for July Fourth

National Average Gas Price

$3.838

The national average gas price as of July 2, 2023.

Projected Travelers for Independence Day

72.2 million

The projected number of Americans traveling at least 50 miles from home for Independence Day.

Consumer Sentiment Increase

10%

The increase in consumer sentiment as gas prices moderated in June.

§ 01 Executive Snapshot

What: Gas prices are high heading into the Fourth of July weekend but show a downward trend.
Who: AAA, University of Michigan, Conference Board, consumers.
Why it matters: Consumer sentiment is positively impacted by easing gas prices, influencing travel and spending behavior over the holiday weekend.

Thursday’s national average gas price was $3.838, up from $3.172 a year ago but down from $3.918 a week ago and $4.290 a month ago.
AAA projected a record-high 72.2 million Americans traveling at least 50 miles from home for Independence Day, up from 71.8 million last year.
61.4 million of these travelers are expected to travel by car, an increase from 61.3 million last year.

This year's gas prices are the highest for the Fourth of July weekend since 2022, despite a recent downward trend since late May.
The consumer sentiment index saw a significant drop in May, attributed to gas price concerns and geopolitical tensions, but began to recover as prices eased in June.

The immediate impact includes increased travel and consumer spending over the holiday weekend, despite higher gas prices.
Long-term, sustained lower gas prices could continue to improve consumer confidence and sentiment, influencing broader economic conditions.

Potential risks include fluctuations in gas prices due to geopolitical events or supply chain disruptions.
Competition from airlines may limit car travel, despite current trends showing a preference for road trips due to gas price dynamics.

Watch for gas price trends in the coming weeks, particularly as the summer driving season progresses.
Monitor consumer sentiment indices and travel statistics post-Independence Day to gauge the economic impact of current gas prices.

§ 07

What is the current trend in gas prices as we approach the Fourth of July?

Gas prices are high but show a downward trend, with the national average at $3.838, down from $4.290 a month ago.

How many Americans are expected to travel for Independence Day this year?

AAA projects a record-high 72.2 million Americans will travel at least 50 miles from home for Independence Day.

Why are consumer sentiments improving despite high gas prices?

Consumer sentiment is positively impacted by easing gas prices, which influences travel and spending behavior over the holiday weekend.

What risks could affect future gas prices?

Fluctuations in gas prices could occur due to geopolitical events or supply chain disruptions.