Half of Americans Have Cut Back or Cancelled Vacation Plans
Due to High Gas Prices
NEW YORK, May 5 /CNW/ - With the summer vacation season fast
approaching, almost half of Americans (47 percent) say they have
already cut back or cancelled vacation plans due to high gas prices and
20 percent have scaled back their plans because of high air fares,
according to this month's RBC Consumer Outlook Index. The Index for May
fell to 42.9, down 1.9 points from April's 44.8 reading.
Soaring gas prices have already caused three-in-10 consumers to reduce
their discretionary spending, according to the survey. With the current
average price per gallon of gas at $3.90 nationally when this poll was
conducted from April 28-May 1*, another 41 percent said they would
reduce spending when gas prices climbed above $4.50 per gallon and
one-in-five said their pain threshold was $5.00 per gallon or more.
Asked the same question in March, when the average price for gas was
about $3.20 per gallon, half of consumers (50 percent) reported that
their threshold for scaling back spending was below $4.00 per gallon
and 20 percent said it was $4.50 per gallon.
"With gasoline price increases showing little sign of abating, this
month we asked once again how this impacts discretionary spending,"
said Tom Porcelli, chief US economist at RBC Capital Markets. "The
results highlight the psychological element involved with rising
gasoline prices, as people revise their pain threshold according to the
reality of what is happening at the pump. This suggests that, despite
what is likely to be a continued drift higher in gasoline prices given
supply and demand dynamics, spending is very likely to hold up."
This month's decline in the RBC Consumer Outlook Index is driven by all
four sub-indices. The Expectations Sub-Index declined to 53.2, down 1.3 points, reaching the lowest point this year,
and the Current Conditions Sub-Index, declined three points to 32.9 from 35.9 in April. Seven-in-10
Americans say the country is on the wrong track, compared to 30 percent
who say it is headed in the right direction. The "wrong track" number
is at the highest level observed since 2009.
The Investments Sub-Index dropped three points to 36.5 this month. Despite the generally positive
performance of the stock market during the past few months, 34 percent
of consumers believe that it is a bad time to invest in the market and
50 percent are unsure about investing in the market.
Although the Jobs Sub-Index edged down one point to 50.8 this month, overall employment confidence
remains stronger than observed throughout 2010. Only 28 percent of
Americans say that someone in their immediate circle is currently
worried about losing a job and just four-in-10 (40 percent) report that
someone in their immediate circle has lost a job in the past six
months, basically unchanged from April.
"Consumer confidence remains fragile, as evidenced by the broad-based
decline in the RBC Consumer Outlook Index - indeed, all sub-indices
posted declines this month," added Porcelli. "But what a consumer says
can sometimes be at odds with what a consumer does. Confidence fell,
but weekly measures of consumer spending remain fairly buoyant and,
from our perspective, the second quarter is looking very much like the
first quarter. In other words, consumption is not losing momentum."
About the RBC Consumer Outlook Index
The RBC U.S. Consumer Outlook Index provides the most up-to-date and
comprehensive outlook of U.S. consumers based on data collected from
interviews with a nationally representative sample of more than 1,000 U.S. adults
conducted over a multi-day polling period each month by Ipsos, the
world's second-largest market and opinion research firm. The results in
this news release reflect some of the findings of the Ipsos poll of
1,011 U.S. adults conducted April 28 - May 1, 2011. The RBC Consumer
Outlook Index is released within 36 hours after the U.S. online panel
members are interviewed. Weighting is employed to balance demographics
and ensure that the survey sample's composition reflects that of the
U.S. adult population according to Census data and to provide results
intended to approximate the sample universe.
*The survey was completed immediately before the news on Osama bin
Laden, and therefore does not reflect the impact of that news.
For further information:
Kait Conetta, RBC Capital Markets, firstname.lastname@example.org, (212) 428-6409
Greg Hamrock, The Hubbell Group, Inc., email@example.com, (781) 878-8882