Aug. 20 (Bloomberg) -- The number of Americans traveling for the Labor Day holiday weekend will climb to the most in five years as consumer confidence boosts spending, AAA forecast.
People taking trips of 50 miles (80 kilometers) or more from home will increase to 34.1 million from 32.7 million last year, AAA, the biggest U.S. motoring organization, said in its annual outlook. That’s the highest level since a record 45.1 million travelers five years ago. The long weekend runs from Aug. 29 to Sept. 2.
“Consumers are the most upbeat they have been since early 2008,” according to AAA, which cited economic optimism fueled in part by a strengthening housing market.
The Thomson Reuters/University of Michigan index of consumer sentiment in the U.S. hit a six-year high in July. New-home construction climbed 5.9 percent to an 896,000 annualized rate that same month, and the S&P/Case-Shiller index of property values in 20 cities rose 12.2 percent in May from a year earlier, the biggest 12-month gain since March 2006.
The expected gain in Labor Day travel is driven by “the increasingly positive economic outlook and optimism in the housing market,” Robert L. Darbelnet, chief executive officer of Heathrow, Florida-based AAA said in a statement. “As home prices improve in many parts of the country, more families are feeling comfortable about traveling this Labor Day holiday.”
Travel by automobile will rise 4.3 percent to 29.2 million travelers from 28 million a year ago. The number of air travelers during the holiday will increase 2.8 percent to 2.61 million from 2.54 million a year ago, making up 8 percent of travel, according to AAA.
As of mid-August, retail gasoline prices were about 2.7 percent lower than the same time a year ago, AAA said. The price at the pump last Labor Day averaged $3.83 a gallon, a record high for the holiday. Retail gasoline, averaged nationwide, fell 0.1 cent yesterday to $3.537 a gallon, AAA said today on its website, the lowest level since July 10.
“AAA forecasts gas prices to remain less expensive than last year based on current trends through the middle of August, but there remains the potential for late-summer hurricanes and refinery problems that could send prices higher,” the group said.
The average distance traveled during the holiday will be 594 miles, down from 626 miles a year earlier, while spending will rise to $804 from $749 per trip, AAA said, based on the median estimate.
The projections by AAA are based on research and forecasts from IHS Global Insight.
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