Consumer confidence falls as gas rises

Gas prices posted this month at a Gulf Gas prices posted this month at a Gulf station located on Route112 in Medford. (Feb. 16, 2012) Photo Credit: Randee Daddona

advertisement | advertise on newsday

After rising for three months, consumer confidence in the metropolitan area fell in February as gasoline climbed to $4 per gallon.

The Siena College Research Institute reported Wednesday its confidence index dropped 1.3 to 76.9 last month compared with January for Long Island, New York City and its northern suburbs.

Still, the index was above 75 for the second consecutive month, meaning the number of people who are optimistic about their economic well-being is larger than the number who are pessimistic.

That optimism could diminish, said Siena pollster Douglas Lonnstrom, because the cost of gasoline is soaring. The average price for a gallon of regular on Long Island was $4.01 Tuesday, the most recent available data from the AAA. On the same date a year ago regular was $3.62.

Siena found 55 percent of metropolitan area residents said pump prices were a somewhat or very serious problem last month, up three percentage points from January and five points from November 2011.

As last month drew to a close, Lonnstrom said, "we saw concern with gas prices beginning to register with a growing percentage as New Yorkers filled up."

advertisement | advertise on newsday

He also said consumers appear to have adjusted to rising grocery prices. The number of people saying the cost of food was somewhat or a very serious problem fell four percentage points to 65 percent in February month over month.

Retailers closely follow consumer confidence because it often signals the willingness of shoppers to open their wallets. Consumer spending accounts for about 70 percent of economic activity nationally.

The buying plans of residents statewide are mixed. When asked about big-ticket purchases in the next six months, more consumers told Siena they were likely to buy an automobile or a computer than in February 2011. Fewer people expected to purchase a home, furniture or start a major home improvement project.

At Smith Haven Mall in Lake Grove Wednesday, some shoppers said they had cut back on other purchases because they're spending more money to fill up their vehicles.

"I'm not buying unless I have to, because most of my money goes for gas right now," said Tim Pershing, a student at Stony Brook University. "If prices keep going up like this, I think the economy will get really bad."

You also may be interested in: