Back in November, economists excitedly predicted that lower oil prices would be great news for consumers.
They suggested that Americans would save about $US42 per month if gas prices remained low throughout the year, which would then translate into more discretionary spending.
But somewhat surprisingly, for the most part, Americans have opted to save that extra money, rather than to spend it.
Still, Americans did spent some of their newfound riches. According to analysts at Bank of America, those savings went toward eating out at “quick service” restaurants like McDonald’s and Wendy’s and “fast casual” restaurants like Chipotle and Panera Bread.
“Based on the aggregated BAC card data, spending at fast casual and quick service dining establishments are growing at a strong 10.8% and 6.2% yoy, respectively,” Bank of America Merrill Lynch’s US Economist Michelle Meyer wrote in a note to clients. “Sales growth accelerated substantially during 2014, particularly in the second half, but has more recently slowed back towards trends that are more in-line with prior years.”
“In our view, the sudden strength in restaurants towards the end of last year may have reflected the support to purchasing power from the drop in gasoline prices,” Meyer added.
In other words, American’s have turned some of their gas savings into burrito bowls at Chipotle.