Is the money Americans are not been pumping into their gas tanks being spent somewhere else? It’s estimated every penny drop in gas prices leads to $1 billion staying in the pockets of consumers. So where is the money going?
Investors will get a clue Thursday when the Census Bureau releases its January retail sales report. Usually, the first retail data of the year is focused on post-holiday spending, and for good reason. Retailers and their investors hope the measured holiday spending season experienced in December can lead to pent-up spending in January.
But early data indicates drivers are not fueling broad spending sprees with their gasoline savings. Retail industry surveys found a drop in sales and shopper traffic last month. However, drivers have accelerated their buying of new cars and trucks. Automakers and car dealers did brisk business in January. The nation’s biggest auto dealer, AutoNation, sold 20 percent more vehicles last month than a year earlier.
Americans are spending money on automobiles. Other economic data is mixed for any dramatic growth of consumer spending. More Americans have been finding new jobs, but wages are essentially flat. The personal savings rate remains around 5 percent, where it has been for two years. And household debt levels have been dropping.
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As driving Americans are spending less to move around, profits (and investors) will follow the destination of those savings.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.