Fewer holiday travelers expected despite lower gas prices
Updated On: Dec 02 2013 07:48:01 PM CST
Thanksgiving travelers are seeing prices at the gas pump lower than they have seen since 2010. While AAA estimates 43.4 million Americans will travel 50 miles or more during the Thanksgiving holiday weekend, that number represents a decrease of nearly a million travelers over the same period last year.
In Wisconsin gas prices are 25 cents less this year than at the same time last year and it is estimated nearly 785,000 people will travel by auto this holiday, which represents a 1.5 percent decrease compared to last year.
Economists believe while prices at the pump are positive, consumer confidence numbers are not.
“The best explanation is that people are sort of adjusting to a fairly pessimistic outlook on the economy,” Justin Sydnor, a professor at the University of Wisconsin School of Business, said. “All of our indicators suggest that the economy is improving, but it is improving very slowly and a lot of those improvements aren’t being seen by a lot of the population. So after you have years and years of continued lack of improvement I think a lot of people have adapted to that.”
As a result, consumer confidence numbers have dropped lower than any point in more than 30 years.
“Right now, for instance, consumer confidence is at very low levels. It fell quite a bit in October during the government shutdown and continued to fall a bit in November,” Syndor said.
Nationally the average price for a gallon of gas is $3.21, the lowest level of the year. In Madison, the current average price for a gallon of gas is $3.14.
AAA expects spending by Thanksgiving holiday travels to decline 6.6 percent this year. In 2012 holiday travelers on average spent $498 and they are forecast to spend $465 this year.
Syndor said travel is seen by some as discretionary spending.
“Things I think we would imagine, if consumer confidence partly reflects sort of our mood or our emotional feeling about the economy, it is plausible then that places we would pull back are on those short-run things, but that really big planning like buying a car are things that are going to be less affected by small shocks to our confidence,” Syndor said.
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