US August consumer sentiment took a nosedive after rising significantly in July, even as gas prices declined by over 15 cents during the month, according to the National Association of Convenience Stores’ (NACS’) Consumer Fuels Survey.
The survey was carried out on behalf of NACS by Penn, Schoen and Berland Associated LLC. A total of 1,111 gas consumers were surveyed between August 5th and 7th, 2014.
In August, just 39% of respondents said they were optimistic about the US economy, compared to 46% in July, even though GDP jumped by +4% in the second quarter.
Older Americans see more gloom
Consumers aged 50+ were the least positive, with only 35% saying they felt optimistic about the economy.
The seven-percentage-point decline overall in optimism was the steepest recorded since January last year when the survey, which aims to determine how gas prices impact consumer sentiment, was introduced.
The NACS represents the convenience store industry that sells four-fifths of all the gas sold in the US. The monthly consumer survey sentiment is conducted to gauge how gas prices impact on broader economic trends.
Since the start of the survey, consumer sentiment has been closely linked to gas prices, with optimism declining when they rise and vice-versa.
Sentiment remains fragile
Jeff Lenard, NACS’ vice president of strategic industry initiatives, said:
“The dramatic swings in consumer optimism over the past two months clearly show that sentiment remains fragile.”
“A rise or fall in everyday expenses – like gas prices – is usually an accurate predictor of sentiment unless something significant occurs, and this month it is clear that the recent sharp drop in stock prices – and concerns over world events – shook up consumers.”
Consumer have a range of economic concerns, including the price of food and interest rates. The NACS says gas prices remain on top of their minds. In August, 39% of consumers said that gas prices had a great impact on their economic sentiment, compared to 41% in July.
On a less negative note, consumers in August said they did not expect things to get worse – at least at the filling stations. Forty-seven percent of respondents said they expect gas prices to rise next month, compared to 64% in July.