Americans’ longstanding addiction to gasoline will continue well into 2008, despite rising fuel costs, and may contribute to a slowdown in the overall economy, a new CreditCards.com poll reveals.
Two out of three Americans say they’ll cut back on spending for other things so they can continue to fill their gas tanks in 2008, with nearly a quarter saying they’ll cut back significantly on other spending. If they follow through, it will not bode well for the economy in 2008, say oil industry analysts and economists. Rising gas prices, the housing slump, the sagging dollar, the employment outlook and the stock market all may converge during the year, boosting the odds of a recession, they say.
Kajal Kapur, a Virginia energy and environmental consultant, says the cost and availability of energy will be a key player in how the overall economy fares: “It would definitely contribute to the slowdown of the economy because of the multiplier effect: Spending less would lead to less consumption of those things and less jobs being created in those areas.”
The poll found:

  • Seven of 10 of those surveyed expect gas prices to be higher a year from now. Only a fifth (22%) said they believe prices will be the same.
  • Of the people who buy gas, three out of five (59%) have already cut back on driving. Even more (69%) among those with incomes of less than $30,000 a year say they have done so.
  • Nearly one in four (23%) say they would not cut back, no matter the cost of gas — and that’s true of 40% of those who have not cut back yet.
  • More than half (58%) say it’ll take another dollar a gallon price increase before they’ll cut back more on driving.
  • A quarter of Americans say they will cut back a lot on spending for other things as a result of high energy costs. More than two-thirds say they’ll cut back on other spending at least a little.
  • Nearly 12% of Americans say they will have to borrow money to pay winter heating bills; the figure rises to 23% among those earning less than $30,000 a year. Another 8.6% say they will pay with credit cards.
  • Seven in 10 Americans (71%) say they will lower their thermostats this winter in an attempt to curb heating costs.
    The poll also suggests that people living in Western states, already gouged by high oil and gas prices and used to paying more at the pump, are more certain than the rest of the nation that gas is going higher. Northeasterners, with fewer wide open spaces to traverse, are least likely to cut back on driving. Those earning more than $75,000 a year are least likely to cut back on driving, no matter what the cost, the poll shows.