New ways to spend less on gas
Economic problems have prompted many people to cut back on gas consumption.
NEW YORK - Florida dental-products salesman Jean Laborde doesn't take as many fishing trips as he used to. Kaitlin Kelly, a student from Hamilton, N.J., has started carpooling to work and school with friends.
Across the country, people already struggling with rising food prices, weak wage growth, and falling home values are finding ways to manage the soaring cost of gasoline. They are combining errands, sharing rides, eliminating pleasure trips, and using more public transportation.
In the panoply of economic problems facing most Americans, gasoline is actually one of the easiest expenses to cut, said Joel Naroff, an economist and president of Naroff Economic Advisors, of Holland, Pa.
"There's an awful lot of trips that people find they don't need to take," he said.
With the driving changes, U.S. consumers caused a remarkable 1 percent drop in gasoline consumption in the last eight-week-period over a year ago, according to Energy Department data. The last time a drop was recorded in a period of similar duration was in 1997.
Previously, when gasoline prices rose to $2 a gallon and $3 a gallon, Americans were expected to trade in their sport-utility vehicles or drive less, but the strong economy kept pumps busy.
Even last May, when gasoline prices hit a record $3.23 a gallon, Americans shrugged it off as another temporary spike. But that was before the economy spiraled downward.
Things are different now that the economy has soured. The combination of sharply higher prices for food and other basic goods and weak home prices that limit the ability to cash out equity for spending money is wearing consumers down.
"In the past, their budgets weren't being attacked from all sides," Naroff said.
With pump prices averaging $3.28 a gallon and expected to peak between $3.50 and $4 this spring, the question becomes: When will drivers begin using significantly less gas?
Experts point to California for one answer. In November, demand plummeted 3.7 percent as gasoline prices soared past $3.40 a gallon - 30 cents more than the national average.
That drop is extraordinary because gasoline consumption typically grows about 1.5 percent year-over-year just to keep up with the population increases, said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.
Part of the California downturn came from low-income consumers' staying home or taking public transportation. But a sharp downturn in the state's economy played a part, said Chris Thornberg, a former UCLA economist who now runs Beacon Economics, a Los Angeles forecasting firm.
The nation as a whole, meanwhile, drove slightly more in November than it had a year earlier; of course, gasoline prices averaged $3.07 a gallon then.
That appears to indicate some consumers begin changing driving habits between that price and $3.40 a gallon.
The tipping point in this weak economy appears to be "somewhere north of $3.25 a gallon," Kloza said.
"I do less recreational activities," said restaurant worker Alex Magby of Morrisville, Pa., as he was gassing up near Trenton, N.J., recently. "I don't go out with my friends as much anymore . . . I just stay at home when I get home."