CHICAGO – Rising gas prices and the recent payroll tax hike have cut into consumers' cash on hand during the first two months of the year, according to research from the National Restaurant Association.
The result has been a decline in restaurant sales and other categories of discretionary spending. Preliminary Census Bureau data show sales at eating and drinking places dropped in both January and February from their December levels, according to the NRA. Monthly sales hit a record high of $45.7 billion in December (on a seasonal-adjusted basis). However, sales declined to $45.4 billion in January, then declined again to 45.1 billion in February. The total sales shortfall was roughly $900 million from December's baseline level, NRA said.
But the scenario for consumers' cash on hand isn't all bleak — gas prices have begun to decline. Gas prices slipped 7 cents during the first two weeks of March, after climbing 50 cents at the start of January to the end of February. The NRA said further declines in gas prices would improve consumers’ cash on hand position, which will help once the effects of sequestration take hold in the months ahead, according to the NRA.