As gas prices continue to drop, US consumers naturally find themselves with a little more cash in their pockets this year. According to a new report from investment banking firm Jefferies, cheaper gas could mean an additional $120 billion to $200 billion for US consumers—up to $930 per driver.
A recent report by Visa concluded that roughly half of the savings from cheap gas are likely to be put away, and one quarter will be used to pay down debt. US consumers will spend the remaining 25 percent on discretionary items such as clothes and food. Applying those numbers to the findings from Jefferies, Americans have an additional $50 billion to spend on, say, Oreo cookies, egg sandwiches, and stone-washed sweatpants.
Jefferies, which polled consumers about the potential savings, says the increased spending won’t be fully underway until the second half of 2015. Even so, as Forbes reported, 11% of respondents to the poll said they’d already spent more on clothing in the past three months because of lower gas prices.
When it does get going, retailers of all sorts can expect a bump in sales. Jefferies pointed in particular to Home Depot, since it found consumers intended to spend more on home improvement purchases, and Gap because of its Old Navy stores, which cater to value-conscious customers. So you may not see more $860 Haider Ackermann sweatpants storming US streets, but an uptick in the $25 variety from Old Navy is a good bet.