The AAA issues a forecast of Memorial Day driving each year. It believes the rise will be 1.2% this weekend, helped in part by lower gas prices and an improved economy. The increase may not seem like much, but it is measured against the millions of miles Americans drive. Memorial Day traffic benchmarks are not unlike holiday sales in the fourth quarter of each year. While poor numbers indicate that consumers are worried, robust ones show that Americans believe they have the financial wherewithal to dip into cash or credit reserves.
The second quarter will be two-thirds over when Memorial Day comes. Many economists believe that economic activity slowed in the quarter. Jobless rates on a national basis barely improved. Housing data show that home prices may have bottomed throughout much of America, but the bottom is a soft one. Americans also have started to think about whether Congress will allow tax cuts to lapse, which would hurt the spending power of much of the middle class. Deciding to spend money this weekend will not be easy.
Douglas A. McIntyre