July 4 :
Travelers in the United States are gearing up for record-breaking trips to celebrate the Fourth of July holiday, and neither high fuel prices nor the possibility of hurricanes will stop them. A record-breaking 71 million people are expected to travel around the U.S. Independence Day holiday, according to the motorist club AAA. This growth trajectory is comparable to what was seen before the epidemic.
According to AAA's projection, over 60 million people will drive, roughly 6 million will fly, and around 4.6 million will utilize buses, trains, or cruises throughout the holiday period. According to AAA spokesperson Andrew Gross, these are unprecedented figures. He also mentioned that if the pandemic hadn't happened, 2020's travel plans would have continued into 2024.
Because it may provide policymakers and central bank officials with a useful gauge of consumer sentiment in an election year, U.S. summer travel will be scrutinized from various angles this year. Despite an increase in consumer spending, inflation remained flat in May, giving the Federal Reserve optimism that it could manage inflation and stave off a recession.
With a nationwide average gallon price of $3.50 on July 2, a 3 cent drop from last year, gasoline prices have been steadily declining over the past few months. Based on AAA booking statistics, the average cost of a domestic round trip is $800, which is 2% lower than last year.
The price of gasoline is still significantly higher than it has ever been, even though it has fallen recently. Gasoline has an average weekly price of less than $2.50 per gallon from 2015 to 2019, with the most recent week's average price coming in at $2.74 in 2019.
Higher rates this year have little impact on vacationers' plans to travel, according to a study of over 1,000 people conducted by American Trucks, an organization that specializes in auto shopping.
According to John LaForge, head of real asset strategy at Wells Fargo Investment Institute, consumers are more affected by the rate of change than by the price itself. According to LaForge, consumer sentiment is unaffected by the gasoline price as it has not fluctuated significantly over the last six months.
Hurricane Beryl, which has devastated several Caribbean islands since July 1, is presently not projected to impact U.S. vacation travel. By the time it reaches the Yucatan Peninsula in Mexico on July 4 night, it will have weakened significantly. In the event that the hurricane interrupts refining operations, drivers will not face dramatic price spikes because the United States has stronger fuel inventories than in previous years.
According to official statistics, U.S. gasoline inventories were 234 million barrels during the week ending June 21, which is 5% more than the same week last year. Compared to previous year, diesel stocks were up approximately 6% and jet fuel stocks were up nearly 7%. Patrick De Haan, an analyst with GasBuddy, stated that it is undeniable that Americans are hopeful and desire to travel.
