WASHINGTON (6/17/15)--U.S. gas prices are nearly a dollar lower than they were a year ago, and American consumers are using the some of the savings to catch up on bills, according to a new Gallup poll.
When asked what they are doing with the money they are saving on lower gas prices, 42% say they are "paying down bills," as opposed to "spending it" (24%) or "saving it" (28%).
The bigger the effect low gas prices have had on a consumer’s finances, the more likely that consumer was to pay down bills, Gallup said. Among those who say lower gas prices are making “a big difference,” 53% are paying down bills. Among those who say lower gas prices are making “some difference,” 45% are paying down bills.
Overall, the majority of Americans, 57%, say lower gas prices are making a noticeable difference in their household finances, including 27% who say they are making a "big difference."
On the downside, when consumers pay bills the extra money is not bolstering the economy as some economists predicted in 2014. While paying down bills could technically be considered a form of spending, it is not spending that generally helps the economy because it covers previous purchases that were already recorded in the nation's gross domestic product (GDP).
With sluggish spending across the United States in the early months of 2015, it is possible that lower gas prices are not contributing to greater spending or GDP growth.