Americans are failing to pump gas-price savings back into the economy

[GliderGuider]

Americans are failing to pump gas-price savings back into the economy

Americans are taking the money they are saving at the gas pump and socking it away, a sign of consumers’ persistent caution even when presented with an unexpected windfall.

This newfound commitment to frugality was illustrated this past week when the nation’s biggest payment-card companies said they aren’t seeing evidence consumers are putting their gasoline savings toward discretionary items like travel, home renovations and electronics.

Instead, people are more often putting the money aside for a rainy day or using it to pay down debt. That more Americans are saving their bounty at the pump comes as a surprise, because the personal savings rate, after rising during and after the recession, has declined steadily over the past two years.

“We haven’t seen the extra savings from lower gas prices translate into additional discretionary consumer spending,” said Ajay Banga, chief executive of MasterCard Inc., on a conference call Friday to discuss quarterly earnings.

Saving it for a rainy day, eh? Good idea, cause it's going to be raining high gas prices again before you know it!

[Kelvin Mace]

1. Actually, invested it

in a used Nissan Leaf. My way of hedging against future gas prices.

[WHEN CRABS ROAR]

25. We bought a used 2004 Prius for $6000.

Now enjoying 45+ MPG.
Some may be paying off credit card debt.

[Kelvin Mace]

27. Used BEVs, hybrids

and PHEVs are the way to go. The first two years will lop off about 60% of the car's price.

[Brickbat]

2. They talked about this on NPR this morning. If you save, you're not helping the economy; if you

spend, you're being a dumbass who isn't thinking of your future. To hear the media tell it, anyway.

[ND-Dem]

3. Since they lost about $30K in assets, I'd guess they're trying to build that back up, pay off bills,

and the like.

They also are faced with declining wages.

Nr. MasterCard Ajay Banga: if you want 'additional discretionary consumer spending,' give us more jobs, higher wage jobs, and tax the rich to create jobs.

Banga is Indian-born & educated, an example of the new globalized corporate elite, BTW. And they're not going to do anything to create higher wages for americans -- or anyone else, really except themselves.

[Sheepshank]

17. it's my opinion too!! n/t

[Rex]

4. It's as if people know that wealth inequality is at an all time high or something.

And that they are losing money daily to the owners and never getting it back. That we have less money to spend than we did 40 years ago. As if people read and watch the news.

[tridim]

5. Yes, people are still recovering from the horrific Bush recession. nt

[annabanana]

6. Believe me, I would LOVE to spend that "windfall" on all

kinds of durable goods, vacations trips, etc etc etc..

And as soon as I get dug out from the credit card bills, and all the other debt incurred when 30% of my assets went POOF.. I will go on a spree the likes of which hasn't been seen since the 50"s.

[Lochloosa]

7. ^^^THIS^^^

Half way there...

[Orsino]

8. Employers are failing to pump enough into economy.

Headline typo fixed.

[Brigid]

20. And we have our thread winner.

[leftstreet]

30. +1

[uponit7771]

9. This same mindset happened after the Great DEPRESSION. People save and it brought on a whole

.. .new generation of non consumers that help spring (IMHO) the civil rights eras because people weren't worried about their crap.

[iandhr]

10. Reminds me of an episode of the West Wing...

… where Bartlett helps Charlie file his tax returns. It turns out he owed money because of the pervious years tax refund. Charlie used it to pay his credit card bill. Bartlett said they hoped inject money into to tourism and retail.


Charlie asks "we don't want people to save or pay down personal debt" the President says "we do when the next guy is president"

[raccoon]

11. Gas is low (right now) but everything else continues to go up...groceries...rent....nt

[marions ghost]

23. bingo

Sticker shock everywhere I go....

[hobbit709]

12. That $5/wk really pumps a lot back in my case

[NCTraveler]

13. When the cost of everything goes up except gas, there won't be much left.

Rent increases alone in the area I am at are well outside of the decrease in fuel costs.

[thesquanderer]

14. For many people, paying off credit card debt is the best thing to do (n/t)

[LibDemAlways]

15. I'm putting the $5.00 I've saved toward the $200 I have to

pay my dentist each month for all the work I put off when my husband lost his job. i now have dental insurance which is a joke and covers very little. Just another way of screwing over the 99ers.

[KG]

18. since i went back to working at 'real' job 13 mos ago, my spare money went to paying off my CC

and now it's going to build up a saving acct again. in a year or so, might start spending 'discretionarly'...

[nichomachus]

19. Hopefully they're saving it for when gas rebounds and jumps to $6 a gallon

The head of OPEC said the other day that once this artificial price drop is over, he expects oil to go to $200 a barrel.

They've got to make up lost revenue some way.

[alarimer]

21. My gas bill went down $20, but my rent went up $17 this year.

So I could spend those $3, but what would be the point?

[geek tragedy]

22. Frugality and savings aren't bad things.

Sheesh.

[Art_from_Ark]

24. Well, given that 47% of Americans live paycheck-to-paycheck

http://www.democraticunderground.com/10026155006

it's not surprising that they aren't going out and squandering the few dollars they're getting from this "windfall".

[2naSalit]

26. And some of us aren't interested in

feeding the corporate/capitalist beast anymore even IF we had the $$$. I resent being categorized as consumer and do whatever I can to avoid such activity as to be thought of as such.

Screw capitalism and corporations, I'll do what I please with my $$ which only is enough to pay most but not all of my bills.

As it is, I can only go to the dentist once every few years and I am still paying for the last visit. And I need glasses, since about ten years ago. I had to spend more than half or my summer wages paying back everyone I borrowed money from to survive for the two years prior.

Don't buy the PR of not putting your earnings/savings back into the economy, especially where corporations are trying to guilt trip you about your money they want to coerce you into sending their way.

[dilby]

28. Probably because most Americans are not saving anything.

They are just not going deeper into debt like they were with the old gas prices.

[Initech]

29. Save your money in a place where the upper 1% can't get to it.

[bigwillq]

31. Can't save or put it back into the economy with pleasure purchases

Because everything else is so expensive.
We might be saving on gas right now, but the price of everything else seems to be going up, up, up.

[Art_from_Ark]

32. I've been seeing that in my recent visits to the US

The spices I used to buy for 50 cents a jar are now 88 cents. The cereal I used to buy for $2.00 a box is now more than $2.50 a box. The Asiago cheese I bought for $3.99 a wedge is now $4.99 a wedge. Fruit of the Looms are $6.99 for a 5-piece set, as opposed to $5.99 before. Home heating is going up, household and car repairs are going up, health care is going up, and on and on.

[Skittles]

33. who are they fucking kidding

do they not know gas was seemingly the ONLY thing to go down in price?

[Heywood J]

34. Just remember that

these are the same dipsticks who want to "adjust" interest rates so that we keep the "right" level of inflation, lest prices ever stop skyrocketing for a while. Gotta maintain that 15% real inflation.