Americans Can't Resist Falling (But Still-High) Gas Prices
Henry Hoenig
· 2 min read
Most Americans were
wincing at the pump
earlier this summer as gas prices hit record highs, topping $5 a gallon for the first time and making people reluctant to drive. But they jumped into their cars with zeal in the second half of the summer as gas prices fell week after week.The average number of weekly driving trips jumped 28% in just five weeks, from mid-July to late August, according to data analysis by
Jerry
.
Key Insights
- The average number of driving trips Americans took per week jumped from 39 to 50 — a 28% increase — from mid-July to late August as gas prices fell steadily, even though they remained above or near record highs set earlier in the year.
- After four weeks of prices around $5 a gallon, gas consumption during the week of July 4 — one of the summer's busiest holiday weekends for driving — hit the lowest level for any single week in July since 1996.
- Average daily gas consumption for all of July — one of the two busiest driving months of the year, along with August — fell 8.3% compared with the same month last year. It was less than 1% higher than the volume consumed in July 2020, during widespread COVID-19 lockdowns.
- The number of trips people take appears correlated with income. This year, drivers living in zip codes with a median household income of $75,000 a year or less took an average of 7% more weekly trips than drivers from zip codes with a median household income above $75,000.
Because gas is a necessity for most Americans, its price generally has a limited impact on demand. That changes somewhat during summers, when driving is often as much about vacations and having fun as it is about life’s daily chores.
But this summer gas prices took a toll. Demand plummeted as gas touched a record $5.10 a gallon in mid-June and hovered around $5 for several more weeks. During the week of July 4, Americans consumed less gas than in any other week in July since 1996.
For the entire month of July, gas consumption fell 8.3% from a year earlier to a level that — with the exception of 2020, during the initial COVID-19 lockdowns — was last seen in 2012, during the economic hangover from the Great Recession.
Studies have shown that people are willing to
pay a higher price
for a product that is on sale than a comparable one that isn’t on sale, reasoning that they are getting a deal via the discount. That may explain why drivers were taking more weekly trips than they had in months in August, even at a time when gas prices remained at levels above or near record highs set in March.After weeks of gas selling for around $5 a gallon, a price of $4.50 or less may have seemed like a good deal.
Methodology
Jerry examined 16.8 million trips by about 33,000 U.S. drivers from Jan. 1 through Aug. 27. For gas prices, we used the Energy Information Administration’s
weekly figures
for all formulations of retail gasoline. For gas demand, we used the EIA’s weekly data
for the volume of finished gasoline product supplied.
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