Wells Fargo: Cheaper gas not fueling consumer spending

It's been hoped for by some businesses and economists that the recent decline in gasoline prices will free up money that consumers will spend elsewhere, giving a boost to the U.S. economy.

Shrewsberry

But according to Wells Fargo's chief financial officer, cheaper gas is not fueling gains in consumer spending.

"It's still good for the consumer, but it’s not leading to increased consumption in a way that people traditionally imagined," John Shrewsberry said Tuesday at an investor conference in Aventura, Fla.

Shrewsberry offered that analysis in response to a question about whether Wells Fargo's credit card customers are charging more to their cards as a result of gas prices being down.

"We're not seeing the savings at the pump translate into a ... commensurate uptick" in consumer spending, Shrewsberry said. "It feels at the moment that people are paying down debt or saving that surplus, which cycles back in as increased deposits at a bank like Wells Fargo."

Gas prices in the Charlotte area are still the lowest in the state, but they’re rising and likely will continue to drift up in coming months, my colleague Katherine Peralta reported today:

As of early Tuesday, it’s $2.111 for a gallon of unleaded regular gas in the Charlotte metro area, while a week ago it was $1.992, according to auto group AAA. Nationwide, the average gas price has increased every day for two weeks and is now $2.185 a gallon.

AAA says it expects gas prices to increase this month due to refinery maintenance and decreased production, The Washington Post reported Monday:

Consumers should expect to see the upward trend continue in the coming weeks as it is typical to see prices increase 30 cents to 50 cents per gallon between now and the spring when more people travel and there is growing demand for fuel.