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Behind the Numbers
Posted at 09:00 AM ET, 05/31/2012

Gas prices dropping. Will consumer spending rise?

Americans are noticing slumping gas prices, according to a new poll from the Washington Post and the Pew Research Center. But a key question lingers for the country’s economy still stuck in limbo: Will gas money saved yield a fresh round of consumer spending?

Gas prices in the United States have fallen sharply since peaking in early April, with Americans weary of high pump prices at last getting some relief. More than half the public — 51 percent — says they have seen a drop-off in prices over the past month. And in areas with the steepest price drops, awareness too spikes higher.  

While dropping about 20 cents nationally in the last month, the easing prices have not been spread evenly across the country. According to government estimates, the average price of a gallon of gas is down by more than 25 cents on the East Coast and in Gulf Coast states. Midwest and Rocky Mountain states have seen only minor relief, on the scale of 15 cents or less. And prices have actually increased on the West Coast, largely as a result of refinery shortages.

Perceptions of changing gas prices are closely tied with local conditions, attention to the news and income. Nearly seven in 10 of Americans living in states where AAA reports prices dropped by 30 cents or more say that gas prices have gone down. But in states that saw a drop of 15 cents or less, fewer than half noticed the change, and four in 10 said they had gone up.

Californians and other people in states where prices actually rose, by contrast, are quite responsive — 74 percent sense that gas prices have gone up. AAA estimated gas prices at $4.28 on Thursday in California.

Most Americans say they are following the price of gas very or fairly closely, and a 56 percent majority of this group says prices have dropped in the past month. By contrast, 43 percent of those who are paying less attention sense a drop in prices.

Income

Americans who are most hard hit by high gas prices are the least likely to sense that gas prices have fallen, perhaps reflecting the impact of still-high rates on those with modest means. Nationally, just 40 percent of those with family incomes under $30,000 notice a drop in gas prices, compared with 57 percent of those with higher incomes. Even in states where gasoline prices have dropped at least 15 cents per gallon, those with lower incomes are substantially less likely to recognize the drop.

Partisanship

Reactions to spiking gas prices this spring was tinted with partisanship, with Republicans reporting greater hardship and blaming President Obama more than others. But the new poll finds Republicans are more likely than Democrats to notice a drop in gas prices.

Polling director Jon Cohen and polling manager Peyton M. Craighill contributed to this report.

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By  |  09:00 AM ET, 05/31/2012

Categories:  Economy

 
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