More drivers hit the road in April
Lower gas prices encourage drivers, with the number of miles driven increasing for the first time in 18 months. But rising prices will likely lead to fewer drivers this summer.
NEW YORK (CNNMoney.com) -- Drivers took advantage of lower gas prices in April, with the number of miles driven increasing for the first time in 18 months, according to a report released Friday.
The Department of Transportation said that travel on all roads and streets rose by 0.6% in April to nearly 250 billion miles, up from 246 billion a year ago. That marked the first increase since October 2007, when the number of miles driven edged up 0.1%.
Drivers were more willing to hit the road in April mostly due to relatively tame gas prices, which averaged about $2.05 a gallon during the month.
But gas prices have now risen every day since April 29 and now average more than $2.50 a gallon in every state and the District of Columbia, according to a daily survey by motorist group AAA. And in some states, such as California and Hawaii, gas has already exceeded $3 a gallon.
Given the pain drivers are currently feeling at the pump, the rebound in miles driven during April is not likely to carry over into the summer months, said John Kilduff, an energy analyst at MF Global in New York.
"I do think consumer's are hitting a wall with $3 gas in a lot of communities," Kilduff said, adding that this summer's driving season will be "very tepid."
Rising gas tempers recovery. Gas prices have been pushed higher by a surge in the price of crude oil, which is the main ingredient in retail gasoline, as investors pump money into the market for crude futures. Oil prices have been trading above $70 a barrel for about two weeks.
Many economists warn that the runup in gas prices could slow the nation's recovery from one of the longest recessions on record.
As consumers who need to drive are forced to shell out more money for gas, the amount they can spend on other items will diminish. That's a problem because the bulk of U.S. economic activity is centered on consumer spending.
Still, gas prices are far below the highs of last summer. The national average price for a gallon of regular gasoline now stands at $2.69, according to AAA. That's down 34.6% from the record high price of $4.114 hit last July.
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