“As the economy makes modest gains, more Americans are joining the labor force this year,” said AAA Chief Operating Officer Marshall L. Doney. “With Labor Day symbolizing the American workers’ contributions to the strength and prosperity of our country, it’s only fitting that millions are choosing to celebrate this positive direction with an all-American road trip.”
Consumer spending is continuing to rise in spite of stagnant income growth. In the third quarter of this year spending is expected to increase 3.8 percent year-over-year, while disposable personal income is only expected to increase 1.4 percent. Reliance on credit cards, rather than increasing income, is fueling holiday travel spending this year. While economic growth is slow, consumers are feeling more comfortable taking on debt.
“This year, Americans are more optimistic about their financial situation,” continued Doney. “Consumer spending continues to outpace disposable income, indicating that Americans are comfortable using their credit cards to take one last summer vacation this year.”
Most U.S. consumers are paying the lowest gas prices for early August since 2010. AAA expects gas prices to have little impact on the number of people traveling for Labor Day, though lower prices could help make travel more affordable. Barring a major development, such as a Gulf Coast hurricane, prices are likely to remain relatively low leading up to the holiday weekend compared to recent years, which will allow travelers to allocate more of their budgets towards travel expenses. The current price of gas is $3.44 compared to $3.59 on Labor Day last year.
(Press release by the American Automobile Association)