Fewer people will be traveling this July Fourth holiday, auto club AAA said Wednesday, even though gasoline is far cheaper this year and pump prices have begun to fall even more.
AAA said it expects 37.1 million travelers — 12 percent of the U.S. population — to take a trip of 50 miles or more away from home this year, a decrease of 1.9 percent from last year.
AAA blames the decline on uncertainty over the economy, particularly the rising unemployment rate and sagging personal incomes.
Gasoline prices rose every day for nearly two months, but began to fall on Monday. Gas at this time last year cost more than $4. National average pump prices are 34 percent lower today at about $2.68.
AAA did say air travel is expected to increase by 4.9 percent because of declining airfares and pent up demand for vacations.
The decline is not as bad as last year when travel fell 10.5 percent. In fact, this year's holiday travel will be bolstered by people who did not travel last year and now are returning to more typical spending and travel patterns.
But unemployment is at 9.4 percent and expected to top 10 percent, household income is dropping and Americans saw their net worth fall by a staggering $1.3 billion in the first quarter amid declining home values and investment portfolios. As a result, many people are opting to stay home, AAA said.
And while gas prices are down from a year ago, their recent rise is not helping, AAA said.
"Many Americans remain cautious about the outlook for their personal finances and these attitudes are reflected in the slight decline in travel we are forecasting for the upcoming holiday weekend," Robert Darbelnet, AAA president and CEO, said in a statement.
AAA projects that 88 percent of the trips, a total of 32.6 million travelers, will go by car, a 2.6 percent drop from last year. Cheaper airfares also will contribute to a decline in auto travel. About 2 million people are expected to travel by plane.
Travelers will spend about $1,160 per household for their trip. Transportation and accommodations will account for about half of the cost with food and drinks taking 20 percent. The rest will be spent on shopping, entertainment and recreation.
IHS Global Insight, in cooperation with AAA, surveyed 2,700 households about their travel plans.