Chart of the Day: Driving through recession

Today’s chart comes from Doug Short, and visualises the US Dept of Transportation figures on traffic volume. Like electricity usage, the number of kilometres (or miles for the US) driven per capita is a good indication of economic strength that cannot be filtered through the murky lens of GDP composition and hedonic reductionism.

Clearly, when we adjust for population growth, the Miles-Driven metric takes on a darker look. The nominal 39-month dip that began in May 1979 grows to 61 months, slightly more than five years. The trough was a 6% decline from the previous peak.

The population-adjusted all-time high dates from June 2005. That’s 74 months — over six years. And since the latest data is the lowest reading since the all-time high, the best we can hope for is that August “might” have been the trough. Our per-capita miles driven based on the age 16-and-older population is about where we were as a nation in April 1997.

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  1. How much is this driven by the economy vs. cost of fuel? That’d be good to overlay, given the peak occurred in June 06 when everything was hunky-dory.

  2. Fuel prices, though cheap in the USA relative to elsewhere, started to rise significantly at about the time of the dip. So we could be seeing some sort of elasticity effect here (notwithstanding that it doesn’t appear in the 70s).

    We also have heavy airline discounting going on that needs to be taken into account for recreational travel.

    But I’d question the assumption that we should continue to see punters driving more as they get more affluent. i.e.

    the number of kilometres (or miles for the US) driven per capita is a good indication of economic strength

    It looks like for a long period that was the case but should it always be the case? Should it be considered a given?

    I would have thought that freight miles are what you want to monitor for economic strength. We have this but is is heavily massaged IMO:

    (and off course rail freight.)

  3. Off topic, I know.

    But what is the substance behind the US equity comeback? Impressive? Indeed. Sustainable?

    • The Fed. engineered another attack on the US dollar, after the last big swoon (19% peak to trough) in the S&P 500 scared the living daylights out of them. Devalue the currency – inflate stocks. Simple as that.

  4. The Peak Oil Poet

    The data would be more useful if it was broken down by age group

    I know of myself and my friends – all middle aged (baby boomers) – that we drive far far less than we used to. The reasons being that we’re doddery old buggers who’d rather potter around the house than run around the city and surrounds – especially considering the number of “safety” cameras popping up everywhere lurking to pick our pockets

    As well, whereas i had to drive all over the place looking for the things i occasionally need to buy that fall outside our normal shopping routine (wasting lots of petrol and time and driving me (almost) to road rage), now i just go “click” and wait. And being older i’m much more happy to wait than i used to be.

    On top of that, the kids have grown up and fled the nest – or at least the first lot have and the second – well i was wise enough to rent and to choose to live where we could walk to most of where we need to go and they can catch a bus.

    There’s other factors too like i bought a motor cycle for commuting, all our holidays are abroad or we don’t have them, petrol is expensive so why waste it, maintaining a car is expensive so why have more than the single car for shopping or even get rid of that – lots of younger people survive completely without cars now.

    If i’m anything to go on then the trend will continue down.

    The best indicator i have come across to date of the state of the Sydney economy is the ethnic breakdown at Flemmington market – when times are good there’s no Europeans shopping there and when times are tough there’s lots – lately they are becoming distinctly visible and it’s a crying shame because everyone puts their prices up accordingly (us whities being incredibly stupid when it comes to haggling (ie we don’t))