Traffic jams on Interstate 93 heading south out of Boston, Wednesday, July 3, 2024, as people leave the city. (Getty Images)
NEW YORK — High fuel costs and the threat of a hurricane are not expected to dampen Americans’ desire to hit the road this summer, as travelers prepare for record-breaking trips to kick off the July 4 festivities.
Driver Team AAA Nearly 71 million people are expected to travel during the Independence Day holiday, a growth trajectory similar to pre-pandemic.
About 60 million people will drive and nearly 6 million will fly to their destinations, while about 4.6 million will take a bus, train or cruise during the holiday season, AAA forecasts.
“We’ve never seen numbers like this,” AAA spokesman Andrew Gross said. “Travel in 2024 looks like it would in 2020, if it weren’t for the pandemic,” he added.
This year, U.S. summer travel activity will be closely watched on many fronts as it could provide central bank officials and policymakers with an important gauge of consumer sentiment in an election year.
Inflation remained unchanged in May even as consumer spending rose, raising hopes that the US Federal Reserve can keep inflation in check while avoiding a recession.
Gasoline prices have been falling for the past few months, with the national average price for a gallon of motor fuel at $3.50 as of Tuesday, down 3 cents from a year ago. Domestic airfares are 2% cheaper than last year, with the average price for a round-trip domestic flight at $800, according to AAA booking data.
‘Want to travel’
Despite recent declines in fuel prices, fuel prices remain well above historical levels. The average price for a gallon of gasoline was $2.74 the week of July 4, 2019, and the weekly average from 2015 to 2019 was below $2.50 a gallon, according to data from the U.S. Energy Information Administration.
However, according to a survey of 1,000 people by auto retailer American Trucks, travelers’ travel plans are largely unaffected by rising prices this year.
The four-week average of U.S. gasoline demand hit a one-year high of 9.2 million barrels per day (bpd) last week as retailers stocked up ahead of the holidays, EIA data showed on Wednesday. The four-week average of jet fuel demand was 1.7 million bpd, identical to the seven-month high reached in early June.
“What we’re seeing is that the rate of change has more of an impact on consumer sentiment than the price itself,” said John LaForge, director of real asset strategy at Wells Fargo Investment Institute.
Because gasoline prices have not increased or decreased significantly over the past six months, consumer sentiment has largely been unaffected, LaForge said.
For now, U.S. vacation travel is unlikely to be affected by Hurricane Beryl, which has devastated several Caribbean islands since Monday but is expected to weaken significantly by the time it makes landfall on Mexico’s Yucatan Peninsula Thursday night.
U.S. fuel inventories are also better stocked than in recent years, giving drivers a head start on sudden price shocks if the storm disrupts refining operations.
EIA data shows U.S. gasoline inventories stood at about 231.7 million barrels for the week ending June 28, up 5.6% from a year ago. Jet fuel inventories were 4.7% higher than a year ago.
“Americans are optimistic and want to travel, there’s no denying that,” said GasBuddy analyst Patrick De Haan.
