Gas prices lower on Memorial Day: How much will you save?
Gas prices have fallen an average 27 cents a gallon since April and are 12 cents lower than last Memorial Day. With gas prices down, experts predict more Memorial Day travel, dining, and shopping.
NEW YORK — More Americans will hit the road this holiday weekend than a year ago. And they'll have a bit more money to spend thanks to lower gas prices.
Memorial Day kicks off the summer travel season, and since pump prices never reached $4 or $5 a gallon ($1.05 to $1.32 a liter), as feared, economists says travelers are likely to dine out or shop more once they pull off the road.
About 30.7 million Americans will drive more than 50 miles (80 kilometers) for Memorial Day trips, according to auto club AAA. That's 400,000 more than last year, a jump AAA attributes to improvement in the economy and consumer attitudes. The number of holiday travelers grows to 34.8 million when you include planes, trains and other means of transportation.
A drop in gas prices encouraged Americans to spend more at restaurants and bars in April. And that trend could continue over the holiday. Pump prices are down 27 cents a gallon since their peak in early April, to $3.67 a gallon (nearly $1 a liter), where they're likely to stay this weekend, predicts Tom Kloza, the chief oil analyst at the Oil Price Information Service. That's 12 cents cheaper than last year. Over the weekend, U.S. drivers will burn about 1.2 billion gallons of gasoline — and spend $144 million less on gas than last year.
Restaurants, movie theaters and retailers hope some of that savings goes to them. Just last month, AAA and IHS Global Insight, the firm that analyzed the AAA study, were expecting travelers to spend less on entertainment, dining and shopping on vacation and devote more time to family and friends. .
Now, travelers might take longer trips or spend more on other things "because there's more money left in their pocket," says John Larson, vice president for IHS.
Still, most people need to restrict their travel budgets. For many, incomes are growing slightly if at all. Household debt remains high. And although the increase in the stock market over the past year has helped some regain wealth lost in the recession, there is still a ways to go. A recent report from the Federal Reserve shows that American household wealth would have to rise by 13 percent to return to pre-recession levels.