Cheap gas is saving Americans $750. So far, they aren't spending it

Americans pocket extra gas money
Americans pocket extra gas money

Americans are saving hundreds on low gas prices this year.

The Obama administration estimates the typical American household will save $750 this year from a discount at the pump. But are they spending that money?

The short answer: No. Most people are pocketing the gas savings. While there are a few signs that families are eating out more, the big deluge of spending that many predicted hasn't happened yet.

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"There is a little bit of a lag here -- it may take a little time for consumers to accumulate some of the savings from the lower gas prices," says George Mokrzan, director of economics at Huntington National Bank."But I think ultimately it should have a positive impact on spending."

The average gallon of gas is about $2.41 today, way down from $3.55, according to AAA. Typically when gas falls that low, Americans spend more but only if they are confident this isn't a temporary blip in prices and the economy is on sound footing.

Some economists, like Mokrzan, say the harsh winter weather explains the lack of spending. Others argue that Americans are concerned gas prices will go back up.

gas savings

Related: Americans just aren't spending

Little spending: While Americans are notoriously poor long-term savers, all the signs indicate they aren't increasing their purchases because of cheap gas -- or anything else right now.

Consumer spending was basically flat in February and retail sales overall actually decreased. That's on top of a lackluster holiday sales period.

What makes those numbers extra disappointing is that many experts forecasted that consumer spending would gain steam in 2015. But so far, just about every number has fallen short.

"They're saving more in the near-term," says Lynn Reaser, an economist at Point Loma Nazarene University in San Diego, although she believes it will pick up in the spring.

It also doesn't help that while more and more Americans are going back to work, their wages are basically flat. If workers don't feel better off, they are more reluctant to spend.

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What Americans are buying: If there's one thing American families are splurging on, it's food. They appear to be having an extra dinner or two at restaurants instead of cooking. Restaurant sales are up almost 10% from a year ago.

They're also heading to the their local car dealer. Auto sales are up 9% from a year ago, according to the Census Bureau.

While this winter might not have been quite as dire as the Polar Vortex of 2014, economists blame the lack of spending outside restaurants and cars on cold weather. Parts of New England saw record amounts of snow this winter. Other regions saw weeks of bone-chilling temperatures.

"It's like deja vu all over again," says Brett Ryan, an economist at Deutsche Bank. "We had a bunch of adverse weather over the past couple of months and that's clouding the consumer spending picture at the moment."

Economists also argue that Americans could be using gas savings to help pay off debt -- student loans, down payment or something else.

The key number to watch is Friday's report from the Labor Department on American jobs and wages in March. If wage growth picks up and Americans continue to rake in gas savings, spending could make a comeback this year.

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