Retail gasoline prices inch up with positive economic data

July 28 (UPI) -- With crude oil prices rallying on the back of upbeat data on the U.S. economy, retail gasoline prices on Friday were up 14 cents per gallon from week-ago levels, AAA said Friday.

The travel club listed a national average retail price of $3.73 for a gallon of regular unleaded gasoline. Elevated state taxes mean drivers in California are paying close to $5 per gallon, while Mississippi shows a price near $3.20, supported by its proximity to the dense network of refineries in the U.S. South.

With second quarter GDP in the U.S. economy coming in stronger than expected, and with fears of a recession subsiding, most market indices are on the rise. West Texas Intermediate, the U.S. benchmark for the price of oil, was trading near $80 per barrel early Friday, close to its highest level since April.

Crude oil prices account for the bulk of what consumers see at the pump. But despite the recent increase in retail gasoline prices, demand seems to be holding up.

The U.S. Energy Information Administration, the statistical arm of the Energy Department, showed the implied reading on gasoline demand, reported as the amount of refined petroleum products sent to the market, is up 2.6% relative to year-ago levels.

That's supported in part by lower gasoline prices. AAA put the national average retail price at $4.28 at this time last year. At this time last year, EIA data showed implied demand was down 7.6% from the same period in 2021.

Consumer confidence remains high, even as the Federal Reserve continues to make borrowing prohibitive by way of continued rate hikes. Discretionary personal spending, however, is on something of a slide downward, suggesting lingering inflationary pressures are catching up with the consumer.

It remains to be seen, however, if the increase in gasoline prices will start to curb enthusiasm given the frequent consumer exposure to prices at the pump. Unlike eggs or milk, gasoline prices are seen on a near-daily basis.

Nice round numbers, such as $4 per gallon nationally, usually trigger a negative reaction for consumers, according to GasBuddy.