Are gas prices, inflation causing people to cancel summer travel plans?

Most Utah residents are now considering scaling back or postponing summer travel plans in the face of continued inflationary pressures and record high gas prices, according to new survey data.

And, the survey results are consistent with local and national measures of consumer sentiment that hit all-time lows in June when it comes to the collective outlook on economic conditions.

A nationwide Deseret News/Hinckley Institute of Politics poll of 808 registered voters conducted June 16-29 found that gas prices and inflation are the most important considerations in deciding whether or not to travel in the next three months .

Gas prices were rated top for 53% of respondents and inflation was the No. 1 concern. 1 for 41% of the survey participants. Levels of COVID-19 cases and hotel availability each drew top ratings of concern from 18% of respondents, although nearly a third indicated the ongoing pandemic was not a consideration in their decision to travel.

The new polling data, compiled by Dan Jones & Associates, comes with a margin of error of plus or minus 3.45 percentage points.

US inflation rates eased slightly in April but returned to a 40-year high of 8.6% in May, according to the latest consumer price index report from the US Labor Department.

The Mountain West states, which include Utah, continued to have some of the highest regional inflation in the country with average prices of goods and services rising 9.4% in May, up from April’s 9.8% increase.

American consumers are now paying for groceries that have increased 11.9% compared to last year, gas that has increased 48.7% during 2021 and housing costs that have increased 5.5% since May 2021.

Prices of new and used vehicles also continue to rise, up 12.6% and 16.1% respectively.

America’s rampant inflation is putting severe pressures on families, forcing them to pay far more for food, gas and rent and reducing their ability to afford inexpensive items, from haircuts to electronics to on holidays. Lower-income Americans and black and Hispanic Americans, in particular, are struggling because, on average, a larger share of their income is consumed by necessities.

And while the national average gas price has fallen over the past several weeks since hitting $5 a gallon nationally last month, Utah drivers have continued to experience record high prices at their local pumps.

On Friday, AAA reported that the average US price for a gallon of regular is now $4.72 a gallon, down from a record $5.02 a gallon in mid-June. In Utah, the average price per gallon on Friday hit $5.22, just a few cents down from the state’s all-time high of $5.26 set on July 1.

And data collected in a new Deseret News survey found that Utahns are feeling that extra cost in ways that are leading to changes in their summer travel itineraries.

When asked by pollsters how current gas prices are affecting their travel plans this summer, 47% of respondents said they would likely take fewer trips, 31% said shorter trips were OK, 17% said they were likely to postpone planned trips and 11% said they were likely to cancel summer trips.

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Phil Dean, senior economist at the University of Utah’s Kem C. Gardner Policy Institute, reviewed the survey’s findings and said the responses from Utah consumers match the kinds of behavioral changes economists expect to see between commodity prices and consumer services that have increased. at record rates during the last months.

“It’s no surprise to see how higher prices are directly affecting the way Utahns are thinking about summer travel plans,” Dean said. “The costs of basic needs have gone up, and these are the areas we really feel the most. Every time you’re at the pump, you get a reminder of where things are.”

Dean also noted that a recent measure of consumer sentiment in the state reflects some of the same concerns Utahns shared in the new Deseret News poll.

June data compiled by the Gardner Institute found that consumer sentiment in Utah fell nearly five points from May to June when asked about the state’s short-term economic outlook to 64.4, the lowest measure since the monthly survey began in 2020. And Utahns are even less optimistic about the nation’s economic prospects, earning a 54.1 confidence rating in June.

A similar study from the University of Michigan found a larger drop in sentiment during June among Americans as a whole. June’s national index of consumer sentiment reflects the lowest reading in the 70-year history of the Michigan poll.

“It’s no surprise that consumers of all backgrounds remain very frustrated with high inflation. Indeed, anyone younger than 40 has not seen rates this high in their lifetime,” Dean said in a statement on the sentiment report. “This high inflation includes many everyday items, including $5 per gallon gasoline and high food prices. Persistently high prices force consumers to reorient their short-term thinking to today’s purchases and wages and sow the seeds of uncertainty for the long-term future.”

While some economists are predicting that the US is heading for a recession, Dean says he still maintains some optimism that it can be avoided and noted that there are some signs that price pressures are easing.

Dean is also positive, with some caveats, about the state’s overall economy’s ability to withstand a further downturn, if one is imminent.

“Utah remains very well placed economically,” he said. “We are not an island and national and global economic conditions affect us. But we still have a lot of growth potential ahead of us and a young, well-educated population, compared to many countries. And, we have the lowest cost of doing business.

“My biggest short-term and long-term concern about the trajectory of our state economy is housing affordability and making sure we take care of that.”

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