Cheap gas led to $480 annual savings for drivers
Cheaper gasoline prices saved low and middle-income households $480 last year, boosting their annual income by more than 1 percent, a new study says.The savings were actually less than projected but still welcomed. People are driving more and using mass transit less. They are also going out to eat more.
Those savings should be particularly welcome to American workers, who have seen wages increase at a glacial pace in recent years. That boost in disposable income from lower gas prices is nearly half the 2.5 percent increase in worker’s wages over the past year, according to the Labor Department.
Consumers put nearly 60 percent of the money they saved on gasoline purchases, back into the economy, according to the JPMorgan Chase Institute, a research arm of the New York bank.
“This savings at the pump benefited restaurants and retailers and contributed to changes in consumers’ transportation choices that we haven’t seen in five years,” said Diana Farrell, chief executive of the JPMorgan Chase Institute, in a statement. “People are driving more than using transit less.”