Gas prices are expected to fall to their lowest Labor Day level since 2020, easing costs for holiday travelers and offering some relief on household budgets already strained by inflation.
Industry tracker GasBuddy projects the national average will drop to $3.15 per gallon over the long weekend — the lowest in five years. Analysts say the decline reflects weaker global oil demand, steady refinery output, and relatively stable supply chains, factors that could boost consumer spending during the final stretch of the summer travel season.
Economists note that while gas prices remain above pre-pandemic levels, the dip could free up disposable income for food, lodging, and retail, providing a modest lift to local economies reliant on holiday traffic. Also, President Trump and his administration have been focused on expanding energy production since taking office.
“Labor Day marks the unofficial end of summer, and when it comes to gas prices, it’s been the cheapest summer to hit the road since the pandemic, a trend that will likely continue with the potential for the national average to fall below $3 per gallon this fall,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
“We’ve seen a remarkably affordable summer to hit the road with incomes up and gas prices down, but there are some challenges that remain: hurricane season and uncertainty over trade, tariffs and Russia’s war on Ukraine. However, I remain optimistic that as cooler weather invades, gas prices too, will seasonally cool off,” De Haan added.
The Trump administration and Republicans are expected to highlight the dip as evidence that inflation is cooling and that the administration’s economic policies are working. Democrats, however, will likely argue prices remain well above the sub-$2 levels seen before the pandemic, casting the relief as temporary and insufficient against broader cost-of-living pressures.
That said, natural disasters in some states have lead to some price increases, industry analysts said. “We believe this latest jump is probably more to do with the flooding that happened at the oil refinery in Indiana,” said AAA public affairs manager Kara Hitchens.
But that said, more price reductions are in the offing. “Winter blends are much cheaper to produce than summer blends,” Hitchens said. “Refineries will be switching over to their winter blends probably mid-September into October.”