Released: November 14, 2008

Lower gas prices don’t make Americans feel rich

Source: Christopher Maag, NY Times (Free Registration)

Drivers are breathing a sigh of relief as gasoline prices plunge across the country. Gas below $1.50 a gallon has appeared in a few places in recent days, and the national average has dropped almost in half since July, to $2.18 a gallon.

Dan Stone drove his pickup less when gas prices rose, and even though a gallon costs less, he has not significantly changed his habits. “I’m pretty sure the gas prices will go right back up,” he said.

But even as worry about gas prices fades, it is being replaced by fear about the broader economy. Each 10-cent drop in gasoline prices puts $12 billion a year back in consumers’ pockets. Instead of spending that cash, people are trying to save it or cut their debt, many said in interviews.

“All that money is going right into paying off my credit cards,” said Jose Martinez, 33, as he pumped gas into his Dodge Charger at Ohio Gas Station No. 1 in Cleveland.

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