You might have heard recently that gasoline prices are way too high. In fact, that might be all you’ve heard about.
As gas prices topped $4 per gallon in March, then $5 per gallon in June, media coverage of exasperated drivers exploded and politicians hoping to tar their opponents cast blame every which way. President Biden’s chief of staff, Ron Klain, reportedly checks gas prices every morning, while a team of White House economists plots strategies to address the problem.
Consumers, however, have bigger financial concerns, according to a new Yahoo Finance / Morning Consult poll on Americans’ inflation worries. In the poll, 63% of respondents said they are very or somewhat confident they can afford gas. Only 29% said they were not confident they could afford gas. Those numbers do reflect the strain high gas prices are causing consumers, but gas prices cause a lot less concern than other things the poll asked about. (The survey of 4,420 adult Americans took place July 16 and 17. Click here for the complete set of poll results.)
The survey asked about 13 different things a typical family needs money for. Gas prices were only the 9th biggest concern. Respondents had the lowest levels of confidence for contributing to retirement and saving money in general. Among expenditures, child care was the biggest concern, with 42% saying they can afford it and 28% saying they can’t. Fewer people need child care than need gasoline, yet the portion saying they can’t afford each was nearly the same.
Here’s the full set of responses for all 13 categories:
Americans are in a gloomy mood, with confidence levels at recessionary levels, by some measures. But Americans may be in better shape than they feel they are. In our survey, 68% said they’re confident they can pay all their bills in full every month, while 28% said they can’t. Solid majorities said they’re confident they can afford school supplies, necessities, gasoline, groceries and non-necessities.
With inflation at 9.1%, the highest level since 1981, economists have struggled to understand how soaring prices affect family budgets and the broader economy. Younger consumers have never seen inflation this high, while many older ones got used to the idea that high inflation was a thing of the past. Depressed confidence levels probably reflect a kind of sticker shock that may be more dramatic than the effect of inflation itself.
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Consumers seem to think it will get harder to afford gas in the near future. While a solid majority said they can afford gas now, 63% said they’re concerned about being able to afford it a month from now. That suggests people think some types of inflation will get worse before getting better, which might help explain Americans’ sour mood: They feel the worst is yet to come.
While Biden’s approval rating has dropped in inverse proportion to rising inflation, there’s a good chance the worst is behind us. The inflation rate in June, 9.1%, occurred as gasoline hit a record high of $5.02 cents per gallon and other fuel prices were close to record highs. Gas prices have tumbled by about 70 cents per gallon since then, and could drift back down toward $4 per gallon. Gasoline only accounts for about 2.6% of typical family spending, but it has an outsized effect on consumer psyches because the prices are advertised on giant signs all around the country, for everybody to see. Nothing else is priced as visibly as gasoline, raising the possibility that confidence will recover as pump prices drop, no matter what other things cost.
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