Economy

Most Americans Don’t Foresee $4 Gas Prices This Year

by Lydia Saad

Fifty-six percent say prices causing them hardship, but just 12% report severe hardship

PRINCETON, NJ -- After seven successive weeks of rising gas prices in the United States, Americans, on average, predict gas will go up to $3.39 a gallon this year. That forecast is 70 cents higher than the average $2.69 Americans say they currently pay for a gallon of regular gas, but is still significantly lower than the record-high $4.11 pump price the government reported last July.

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The slight majority of Americans (53%) in the June 14-17 Gallup Poll believe gas prices will top out at no more than $3.49 per gallon in 2009. Forty-two percent believe they will go higher than that, including only 22% who predict they will hit $4 or more.

Gas Price Pains

According to the U.S. Department of Energy, the average pump price for regular gas is up 36 cents compared with a month ago. At today's price level, 56% of Americans say the recent price hikes are causing them financial hardship -- including 12% who say they are causing "severe hardship" that affects their ability to maintain their current standard of living.

Nearly three-quarters of those earning less than $30,000 per year, 71%, say gas prices have caused them hardship. The figure is only slightly lower among middle-income earners (60%), but drops to 39% among those making $75,000 or more. Experiencing severe hardship is even more pronounced by income, ranging from 24% among low-income earners to just 3% among the highest income group.

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The percentage of Americans reporting any degree of hardship from gas prices this year is about average for the Gallup trend. The current 56% is higher than the 36% to 44% found in 2000, when prices were still well below $2. However, it is substantially lower than the 71% found in May 2008, when the average price was $3.60.

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Implications

Rising gas prices are beginning to affect Americans -- a majority say the higher prices are causing them financial hardship. Still, Americans do not expect gas prices to climb as high as they did last year.

But even a more modest increase in gas prices is unwelcome news for consumers and the broader U.S. economy. U.S. consumers have pulled back significantly on their spending this year, even as gas prices were at low levels for much of the early part of 2009. Higher gas prices would leave Americans with even less disposable income to spend to help get the economy moving again.

Survey Methods

Results are based on telephone interviews with 1,011 national adults, aged 18 and older, conducted June 14-17, 2009. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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Gallup http://www.gallup.com/poll/120995/Americans-Don-Foresee-Gas-Prices-Year.aspx
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