This January quote from Obama may have crushed the hopes economists had for the US economy

Barack obama gas stationREUTERS/Frank Polich‘I would strongly advise American consumers to continue to think about how you save money at the pump…’

Consumers are not spending the savings they have gotten from low gas prices.

This has puzzled many economists, who had seen the savings as a sort of tax break that would lead consumers to splurge on other goods.

And there may be one reason why: President Obama.

Early in January, Obama warned that low gas prices “won’t be around forever,” telling the Detroit News:

I would strongly advise American consumers to continue to think about how you save money at the pump because it is good for the environment, it’s good for family pocketbooks and if you go back to old habits and suddenly gas is back at $US3.50, you are going to not be real happy.

And so with this word of caution — that consumers might be better off saving their gas savings, or not ramping up spending significantly — Obama may have torpedoed the biggest economic theme of early 2015: that consumer spending would boost the economy.

Of course, whether Americans heeded this specific advice or not, it is clear that the decline in gas prices is not something many Americans fully believed would continue.

On Wednesday, Business Insider’s Sam Ro highlighted research from Goldman Sachs that showed consumers’ expectations for low gas prices surged near the end of last year, indicating that Americans didn’t believe the decline in gas prices would last.

And, overall, it hasn’t: gas prices are up about $US0.70 a gallon in the last few months.

Expectations for future gas price increases have moved back to their historical average in the last few months, but the damage may be done.

In February, we highlighted research from Morgan Stanley that showed spending climbed in the six months from June 2014, when oil and gas prices started to fall. But spending suddenly dipped in 2015, and the firm’s economists pointed to “lingering caution” among consumers.

But by now, time for a boom in spending may have come and gone.

Here’s the chart, via Goldman, showing how consumers never really believed the future of low gas prices, and how they have simply reverted to their old expectations for what they will pay at the pump.

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