Lower gas prices are making Americans feel better about everything else

Americans are starting to feel more optimistic about the economy, despite recession talk and climbing interest rates.

Several sentiment indicators show consumers’ mood is clearly brightening. Why? The answer can probably be found on gas station price signs.

Gas prices and consumer sentiment are usually inversely correlated in the US because of how ubiquitous those signs are. Even though gas only makes up 5% of American budgets, its prices are seen by everyone, driving or not, providing a daily gauge for inflation.