By Ashley Kindergan From The Financialist

When it comes to a love of the open road, the United States stands apart. Americans drive more than motorists anywhere else in the world, according to the World Bank. When the average price of a gallon of gasoline dropped from $3.70 to just above $2 — a 45 percent drop — in seven months, economists predicted American households would put their unexpected $150 billion windfall to use in shopping malls, restaurants, and online. The hoped-for spending boom has yet to truly materialize – stuck in traffic? – but it’s still on the way.

U.S. consumer spending increased 4.3 percent in the fourth quarter – the biggest quarterly jump since 2006. But that included a slight decline (0.3 percent) in December, despite the fact that personal income also rose by 0.3 percent that month. Meanwhile, retail sales excluding automobiles and gasoline were completely flat in December and inched up just 0.2 percent in January.

But the larger economic backdrop is getting steadily more supportive of an increase in consumer spending. Job growth, as evidenced in non-farm payroll data, is faster than at any time since 1999. At the same time, consumer credit is expanding rapidly. The 6.9 percent increase in 2014 is the fastest annual growth rate since 2001. And while consumer confidence dipped in February, it’s still running at pre-crisis levels.

Then there’s the fact that the savings from cheap oil – and presumably, the wealth effect from those savings – haven’t fully materialized, largely due to seasonal factors. Consumers spent $8 billion percent less on energy on an annual basis in December, but savings aren’t expected to peak until March at $16 billion.

Gasoline usage gradually increases as the weather warms and doesn’t peak until August. The real savings, in other words, will start to hit home when Americans who have been hunkered down for winter start venturing out again. But it’s also true that good news simply takes time to sink in. “On average, it takes 6 months of declining gasoline prices for the consumer to believe that it’s here to stay and feel comfortable enough to spend,” says Barbara Reinhard, Chief Investment Officer in the Americas for Credit Suisse’s Private Banking and Wealth Management Division. “So we think that you are about to see a strong trajectory for consumer spending in the US, and globally as a result of the decline in commodity prices.”

A second catalyst for a consumer spending uptick has nothing to do with gasoline. Consumers crank up their thermostats the most in January and February, which in many cases means racking up big heating oil bills. The Northeast uses 81 percent of the nation’s heating oil, and February temperatures have shattered record lows from Washington, D.C. to snow-inundated Boston.

But this year, despite the bitter cold, the Energy Information Administration forecasts that Americans who warm their homes with heating oil will spend 30 percent less ($1,645) than they did last year, thanks to lower prices. Those who use propane can expect to spend 23 percent less in the Northeast and 35 percent in the Midwest.

While total spending on energy decreased just $1.6 billion in the Northeast in December, EIA forecasts suggest those savings will surge to $2 billion in February and up again, to $3 billion, in March. Retailers with large customer bases in the Northeast, including DSW (27 percent of stores) TJ Maxx (26 percent), Dick’s Sporting Goods (26 percent), Burlington Coat Factory (23 percent), and Macy’s (23 percent), may see a benefit from consumers having more money in their pockets, according to Credit Suisse. For retailers and other consumer-focused businesses, March may well come in like a lion and out like a lamb.

For more on this story go to: http://www.thefinancialist.com/be-patient-an-oil-driven-spending-boom-is-coming/#sthash.jS5Hpd3E.dpuf