U.S. spending driven by higher gas prices

May 31 (UPI) -- The U.S. federal government reported Thursday that spending on gasoline and other energy products contributed most to a rise in consumer spending.

The U.S. Commerce Department reported personal income improved $49.5 billion, or 0.3 percent, in April. Disposable personal income increased $60.9 billion, or 4 percent, but spending -- known as person consumption expenditures -- increased $79.8 billion, or 0.6 percent.

"The $42.8 billion increase in real PCE in April reflected an increase of $15.4 billion in spending for goods and a $27.5 billion increase in spending for services," the department's report read. "Within goods, spending for gasoline and other energy goods was a leading contributor to the increase."

Retail price group GasBuddy listed a national average price for a gallon of regular unleaded gasoline at $2.98, while motor club AAA reported $2.96 per gallon for Thursday. Those compare with a national average price for this date last year of $2.37 per gallon.

The retail price for a gallon of gas has been on a steady rise for most of May. Rising crude oil prices, attributed in part to the potential loss of Iran as a major exporter and steady declines from Venezuela, have led to corresponding spikes in retail gas prices.

The price for Brent crude oil, which drives the price of gas, topped $80 per barrel earlier this month, a four-year high. Gas prices are still going up even though Brent was trading closer to $78 per barrel on Thursday.

The consumer price index, a gauge of how much people spend on everything from soda to socks, was up 2.5 percent for the 12 months ending in April. For gasoline, the index was up 13.4 percent. The same metric for eating out, by comparison, was up 0.5 percent from last year.

The rise on consumer fuel prices means U.S. motorists are collectively paying tens of millions of dollars more to fill up their vehicles than they were a year ago. The U.S. economy, with discretionary spending under threat, may be facing some headwinds as a result because it may be counteracting some of the benefits from a federal tax overhaul.

"The nation's bill for gasoline in March was $30.4 billion, while rising to $33.1 billion in April," GasBuddy senior analyst Patrick DeHaan told UPI. "Those figures are likely to be eclipsed by spending in May, with the monthly average poised to be $2.90 per gallon for a total monthly spend of $35.2 billion."