U.S. drivers are enjoying the cheapest December gasoline prices since 2020, with the national average for unleaded fuel dipping below $3 per gallon for much of the month—a welcome break for the record 122 million Americans expected to travel during the holiday period. According to AAA, nearly 110 million of those travelers will go by car, benefiting from pump costs that are down about 7% from a month ago and 43% from mid-2022 peaks near $5.

The decline offers some offset to persistent inflation in other categories. In CNBC’s All-America Economic Survey, 46% of those planning to spend less this holiday season cited high goods costs as the reason. Lower fuel prices may help ease overall travel expenses, though regional disparities remain sharp: while Oklahoma drivers pay under $2.30 per gallon, averages in Hawaii and California still exceed $4.

A Seasonal Boost Amid Economic Uncertainty

The drop in gasoline costs reflects a combination of moderating crude oil prices, subdued seasonal demand, and improved refinery output. For households navigating elevated prices in essentials like food and housing, the relief at the pump provides a tangible, if partial, counterbalance. As holiday travel hits new highs, the affordability of driving could support consumer spending in other areas during a critical retail period.

However, the broader economic picture remains mixed. While fuel costs have receded, inflation in services and core goods persists, keeping pressure on household budgets. Still, for millions of families hitting the road this season, the cost savings represent a bright spot in an otherwise cautious spending environment.