Rising gas prices are one of the biggest threats to the economy at this point. The Energy Information Administration reported on Monday that gas prices are averaging $3.92 on the national level, up 5 cents from last week and 62 cents since the beginning of the year. In many major cities, including Chicago, Los Angeles, San Francisco and Seattle, pump prices are already well above the $4 mark.
Not only does this threaten the fragile economy recovery – the national economy is still 5.3 million jobs down from its pre-recession peak – it also crowds out disposable income that could be spent in discretionary areas like restaurants.
Thus far, the overall spending impact has not been significant, with total restaurant sales reaching a record monthly high of $43.4 billion in February, according to Census Bureau figures that are adjusted for seasonal and trading day factors (including Leap Year). However, these figures represent total industry sales volume, including new restaurants entering the market.