AAA Reports Labor Day Weekend Gas Prices Reach Record High

The recent gas prices for Labor Day weekend have reached a record high, according to the American Automobile Association (AAA). The national average gas price is now $4.14, surpassing the previous record of $3.82 set on Labor Day weekend in 2012. This increase is attributed to the high cost of crude oil, which is affected by volatility in the Strait of Hormuz. Despite a typical decrease in gasoline demand this time of year, which usually lowers gas prices, this year is different due to the aforementioned factors.

AAA's data shows that the national average gas price has risen from $4.0997 one week ago, $4.0946 one month ago, and $3.1903 one year ago. The reduced gasoline demand over the past week, from 9.04 million barrels per day to the current 8.92 million, has also contributed to the price hike. The decrease in demand is cited by the Energy Information Administration's data.

Labor Day marks one of the last long holiday weekends of summer, during which many people travel. AAA's findings are supported by the University of Michigan's Surveys of Consumers, which reported a significant decline in consumer sentiment. The survey found a 6% drop from July and an 11% decrease below August 2025 due to concerns about inflation and gas prices.

Joanne Hsu, Director of Surveys of Consumers, stated that consumers anticipate further price increases in the short and long run, citing ongoing policy uncertainty, particularly the Iran conflict, as a major contributor to these concerns.

The impact of high gas prices extends beyond consumer wallets, as it affects their overall economic outlook. Affirm Co-Founder and CEO Max Levchin mentioned that consumers are increasingly turning to buy now, pay later providers to manage the impact of inflation. The PYMNTS Intelligence report "Wage to Wallet™ Index: When the Drive Isn’t Worth the Pay: How Fuel Costs Reshape Who Can Afford to Work" highlights that fuel prices not only influence consumer spending but also determine their ability to participate in the labor market.