Rising Gas Prices Impact Consumer Spending
As of mid-April 2023, the national average gas price has exceeded $4.40 per gallon, causing over $100 to fill the 23-gallon tank of the Ford F-150, America’s best-selling vehicle. This is a substantial increase from around $2.98 per gallon before the onset of the war in Iran, reflecting a 50% hike in fuel costs.
A recent CNBC poll indicated that 80% of Americans are changing their spending habits due to rising gas prices, with approximately 60% cutting back on entertainment and travel. The first estimate for Q1 2023 gross domestic product growth showed a slight 2% increase, mainly driven by business investment, while consumer spending growth has slowed significantly. High gasoline prices are not only affecting financial decisions but are also diminishing consumer sentiment, which is currently at a record low according to the University of Michigan.
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