(Bloomberg) — Consumer spending in the U.S. has been disappointing. It appears household are opting to save the extra cash they’re getting at the gas tank rather than spend it on goods and services. One research firm says that is about to change.
Ian Shepherdson, the Chief Economist at Pantheon MacroEconomics, says that the jump in the savings rate is only temporary, and that the next few months should bring a surge in spending. The firm cites a lag effect between low gas prices and their impact on the consumer.
“If we are right in our view that the lag between shifts in gasoline prices and the response from consumers is about six months—longer than markets seem to think—then the next few months should see spending surge.”
The personal savings rate reached 5.5 percent in January, up from 4.5 percent in October, according to the U.S. Department of Commerce. Gas prices have declined as oil plunged more than 50 percent from its June highs.