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Americans Can Expect Record Gas Prices over Independence Day HolidayKevin Hays Salem-News.com
Willingness to take on credit card debt, not an increase in income, will be responsible for the increase in Independence Day holiday consumer spending AAA says.
(SALEM, Ore. ) - With a projected 41 million Americans expected to take to the road over the Independence Day holiday, AAA says drivers can expect to pay the highest gas prices since 2008.
AAA says the majority of travelers will travel 50 miles or more away from home, an almost two percent increase from last year, and a 14 percent increase compared to the Memorial Day holiday weekend. The Independence Day holiday travel period is defined as Wednesday, July 2 to Sunday, July 6.
The national average price of regular unleaded gas is about 20-cents per gallon more expensive than the average on July 4, 2013, which was $3.48 per gallon. In recent years, gas prices have declined in the weeks leading up to Independence Day, but has not occurred this summer due to higher crude oil costs as fighting intensifies in Iraq.
Holiday air travel is expected to increase one percent to 3.1 million travelers from 3.07 million last year. Travelers will encounter airfares five percent lower than last year and car rental costs that remain consistent with last year at $58 dollars.
The nationwide high gas prices will not have a significant impact on the number of people traveling according to AAA, but it could result in some consumers cutting back on dining, shopping or other trip activities. More American’s are expected to dust off their old credit cards to pay for their activities over the Independence Day holiday this year says AAA.
An increase in consumer spending is primarily due to increasing credit, rather than rising incomes. Consumers have been hesitant to add to their credit card balances the past several years, but continued improvements in the employment picture and rising home values means they are starting to feel more comfortable taking on debt. In addition to consumer spending, a boost in consumer confidence and the employment outlook are driving more Americans to take a road trip.
“Steady improvement in the economy has spurred increased consumer confidence and spending,” said AAA Chief Operating Officer Marshall L. Doney. “Optimistic Americans are more willing to take on debt this year, dusting off their credit cards to pay for a much-needed Independence Day getaway.”
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