Americans are finally aware they have more money in their pockets from cheaper gasoline prices, and they are putting it to use at a faster pace.
The most recent CNBC All-America Economic Survey shows a major shift in attitude among consumers in just three months. Conducted March 26 to 29, the study found that 56 percent of those surveyed were aware of the savings and were using them mostly to pay off debt or spend on other things. Forty-two percent said they were not saving more, spending more or even driving more with their gas savings. Two percent were unsure.
This is a big change from December, when 61 percent of the respondents said there were not doing anything with the savings. But after three more months of low gas prices, that has changed.
Gasoline prices in December were slightly higher, starting the month at an average $2.80 per gallon nationally, and falling to levels under $2.40 per gallon by the end of the month, according to AAA data. Gasoline prices at the end of March were just above $2.40.
Economists say it takes some time for the gas savings to filter into the economy—or at least for consumers to become aware of the savings.
The “gasoline bonus” should also continue through the end of the year. “I do think we’ll trend a little bit higher, but personally I think the range of prices for the rest of the year is probably $2.70 on the high side and $1.90 on the lower side, and we’re right on the average,” said Tom Kloza, analyst and founder at Oil Price Information Service.
“It translates to about $140 billion in more disposable income for this year, versus last year,” said Kloza.
As for how they are using the savings, 25 percent of the recent survey respondents, twice as many as in December, said they were paying down debt, and another 17 percent said they were spending more. That increased from just 8 percent. Eleven percent said they were driving more, compared to 10 percent in December, and 15 percent said they were saving more, compared to 13 percent.
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Just as Americans changed their behavior based on gasoline prices, they also changed their views on the state of the economy. In the March survey, a record 27 percent judged the economy as excellent or good, the highest level in eight years. In the survey a year ago, just 16 percent of the public gave the economy good marks, and it was just 4 percent at the beginning of the 2008 recession.
The CNBC poll of 800 Americans across the nation, conducted by the Democratic/Republican polling duo of Hart-McInturff, carries a margin of error of 3.5 percent.