Gas Price And Consumer Confidence Watch

We’ve been repeating for some time now that the big five drivers of foodservice in the general economy are employment trends, disposable income, consumer spending, consumer confidence, and gasoline prices. Since we’ve already touched on the outlook for the first three in this issue (all three are very positive), we might as well look at the other two: In one case very positive, in another still quite positive though down a tad.

The national average price of a gallon of regular gasoline fell below $1.70 on Monday, February 15 and all the trends point toward continuation of the lowest prices since the Great Recession, according to AAA Fuel Gauge Report.

On the consumer confidence side, the University of Michigan reported its Consumer Sentiment Index fell slightly in the preliminary February reading to 90.7 from a final January reading of 92; those surveyed were a bit less optimistic about the outlook for the economy this year. But they also reported the lowest inflation expectation for the next five years of any time since UM started asking the question in the late 1970s. Combined with recent modest through positive wage gains, consumers still seem to believe their prospects are improving.

“All things considered, confidence is holding up surprisingly well,” Paul Ashworth, chief U.S. economist at Capital Economics, told the Wall Street Journal.