Middle income households spent $477 less on gasoline in 2015, thanks to the 25 percent year-over-year slump in gas prices, according to a new report. ‘It’s quite significant,’ said Diana Farrell, president and CEO of the JPMorgan Chase Institute, which authored the study, tapping into a sample of one million Chase customers in 23 states. ‘For most households, it’s 1 percent of their income and that’s a pretty significant raise and for the lower income households [this figure] represents 1.4 percent more disposable income.’ The $477 figure amounts to half of the average mortgage or rent payment for middle-income consumers, the report said. ‘[They spent this money] on more gas, which reverses a five-year trend of people spending less on gas and driving less,’ Farrell said. Aside from driving more, households spent $214, or 45 percent of the drop in gas spending on non-gas goods and services, largely restaurants and retail. This is in-line with a recent consumer trend showing consumers raising their spending on experiences, rather than tangible goods, according to Farrell. Going forward, Farrell said most people expect gas prices to remain low. The national average for a gallon of gas stood at $2.23, according to AAA, compared to $2.38 one month ago and $2.77 one year ago. Oil prices are trading near $46 a barrel, its lowest level in two months, but nearly double its 2016 low of $26.21 a barrel reached on February 11. While the aforementioned report examined 2015 spending, Farrell said the first quarter of 2016 was a disappointment. That’s in-line with retail sales data released by the U.S. Census bureau, which showed declines in consumer spending in January, February and March, followed by a 1.3 percent month-over-month rebound in April. Retail sales data for June is released on Friday at 8:30am Eastern.
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