Labor Day travel projected to hit five-year high
WASHINGTON -- Like the economy, consumer spending has been sluggish during the recovery. But there are signs that the pace may be picking up.
Credit is flowing a little more freely. Consumer confidence measures rose to post-recession highs this summer. And many people are looking to replace their old cars and appliances.
The latest indication comes from AAA, which projected Tuesday that travel over this Labor Day holiday will be the strongest in five years.
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The motor travel organization, in its annual outlook, projected that 34.1 million Americans will take trips of 50 miles or more from home during the upcoming holiday period. That is up 4.2% from a year ago, with travel by both car and air rising.
AAA predicts travelers will cover on average 594 miles, compared with 626 miles during the Labor Day holiday in 2012. But travelers will spend more this Labor Day period -- a median $804 versus $749 a year ago.
That’s good news for restaurants, hotels and retailers in general, which have had a choppy recovery.
Travelers will get a little bit of help from gas prices, which as of mid-August were running on average nearly 3% lower than a year ago. Consumers this year have been encouraged by continued gains in the housing market, as well as higher stock prices despite the retreat in recent days.
What’s holding back many consumers, though, is the still-slow job market and weak income growth. Many of the new jobs added recently have been in low-paying, part-time leisure and retail businesses, particularly restaurants.
The extra Labor Day spending will be needed to help those workers.
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