While many Americans don’t check the stock market every day, the price of gasoline is one economic indicator Americans regularly pay attention to. And gas prices are on the rise, which means your summer travel budget could take a hit.
With the national average now likely to hit $3 a gallon this summer (as of today, Indiana’s state average is $3.01 a gallon), prices have increased by about 50 cents from this time last year. Assuming summer travelers drive roughly the same amount this year as they have previously between the months of May and September, that could translate to an increase in nearly $250 at the pump as compared to last summer (and over $300 from the summer of 2016).
Though the switch to summer blends typically causes a bump up in price each year, oil-rich countries like Saudi Arabia and Russia have successfully kept oil production down, and the price of crude oil is the highest it’s been in four years. Combined with President Trump’s announcement to withdraw from the Iran nuclear deal and possibly reinstate sanctions against the oil-rich country, prices are expected to steadily climb at the pumps.
This will affect the pockets of American consumers, which could affect the economy. In fact, research shows that American drivers are more likely to adjust their spending habits once gasoline prices hit $3 a gallon. Despite the implementation of President Trump’s Tax Cuts and Jobs Act, which stock market investors hoped would spur greater economic activity, consumers may find that the rising gas prices are eating into their take-home pay, ultimately affecting their summer travel plans.