First Monthly Travel Increase Since October 2007
The Federal Highway Administration reported today that travel on all roads and streets increased by by +0.6% (1.4 billion vehicle miles) in April 2009 compared to April 2008. This was the first monthly percentage increase compared to the same month in the previous year since October 2007, and follows 17 consecutive monthly percentage decreases (see graph above).
Does this increased driving suggest consumers are feeling more confident? Another green shoot/mustard seed? Possibly.
Comments welcome.
HT: John Thacker
12 Comments:
Transportation equals commerce. Enough said.
The slight increase in travel in April (versus April 2008) is lower than our annual rate of population growth. Thus, on a per person basis, travel is still lower than last year.
Why aren't these numbers adjusted for population?
"Why aren't these numbers adjusted for population?"
The numbers are used to predict wear and tear, and capacity requirements, not make a political point?
I don't know either.
There is much more going on than meets the casual eye. Don't dismiss it as a political point when these are useful statistics for more than just road wear-and-tear.
Yes, VMT generally rises because of increases in population but the trend seems to have turned downward after 2004. We don't have population change statistics in the last year, but we do have other statistics.
Year-over-year motor vehicle registrations hit a local maximum in 2004. The rate of increase has been slowing ever since (2007 accelerated ever-so-slightly over 2006). We don't have data for 2008 yet, but I have no reason to think 2008 was a banner year for registrations based on sales.
The rate of MV registration growth has trended downward since 1950. I can only speculate that it has to do with congestion, economic development in suburban communities, and saturation of households with multiple automobiles.
Real gas prices have been rising since 1999 so why are these structural changes happening so late in the game? Have we passed some threshhold in real gas prices? VMT dropped much more dramatically in 1974 and 1979, but recovered rather quickly.
EIA Real Gas Prices
Easter fell in April this year and in March in 2008. That is probably the most compelling explanation for this blip. Easter fell in April in 2007 and 2006. Note that VMT rose in April in those years compared to the previous year too.
Easter Dates
It could be fuel prices, but the data is not confessing.
Fuel prices have been at least 30 percent lower, year-over-year, every month since November 2008 and about 40 percent lower every month since December. If gas prices are explanatory, why were VMT down so much over-the-year every month since December albeit on a rising trend?
Gas prices were still rising in April 2008 and peaked in July so if the percentage decline for May, June and July exceed 40%, that could foretell significant rises in VMT in the coming months.
Since 1970, vehicle miles traveled (VMT) has always peaked in August except for five years when it peaked in July. There is usually a huge spike in May VMT (probably from graduations) and then a large drop-off relative to May in every June.
April and June VMT have declined from the previous years in 2006, 2007, and 2008. Prior to that, VMT has almost always increased in those two months compared to the previous year.
(BTW, this is how you begin to analyze economic data. You follow up with regression analysis. You certainly don't make declarative statements on microscopic views of a time series)
Don't forget to factor in the large decrease in the cost of flying commercially over the years. Deregulation and efficiencies have resulted in increasingly affordable transportation to the masses, resulting in fewer "road trips" and more travel by airplane.
Easter fell in April this year and in March in 2008. That is probably the most compelling explanation for this blip. Easter fell in April in 2007 and 2006. Note that VMT rose in April in those years compared to the previous year too.
Touche!
Weren't we just talking about the Easter Effect in the X-12-ARIMA seasonal adjustment model?
Here it is, alive and well.
Just earlier this month, I increased my monthly mileage by 0.6% as well so I suppose I can fall into any statistical evaluation erstwhile planned.
However, this was due to the fact that my eldest son graduated from high school. Apparently, the friend who was going to drive him down to the beach after graduation had a "falling out" with her parents and therefore my son was left without a ride. I, as good father, drove him myself to the beach resort as well as returning back home. Then...drum roll please...returned the following week to pick him up again and drive back.
Calculating out the total mileage for the month, I can say I easily inched by the 0.6% increase in per capita mileage. Admittedly we are talking this present month and not the study month of April...but why quibble, eh?
Does my story now influence any apparent uptick in economic "good news"?
"Transportation equals commerce. Enough said"...
Yep! Well said...
Still some are coming up with more bad news...
Consider the following from Derek Thompson (via an Instapundit link) writing at the business blog of the Atlantic: What the World's Great Recession Looks Like
Note this bit: But today I got my hands on alarming graphs from the folks at VoxEU (via a column by Martin Wolf) which convincingly demonstrates that, for the much of the world, 2009 looks, without question, just as bad, if not worse, than the first years of the Great Depression...
No graphs on rising gas prices and commentary on how this is a tax hike spreading through the economy?
"Real gas prices have been rising since 1999 so why are these structural changes happening so late in the game?"
Hmm, looking at your graph, I'd say that real gas prices rose in 1999 but dipped back down in 2001-2002 before the big rise started in 2004. And that, to me, seems like it matches the Vehicle Miles Traveled rolling average reasonably well, with perhaps a lag.
Personally, I'm a believer that gas price effects, at least what we've seen in the last few years, are stronger than the economic effects. The plunge in VMT started when prices were going up but the economy was still growing.
Though Easter timing (and the number of days in February on leap years) can throw off these year-over-year monthly numbers, certainly.
"No graphs on rising gas prices and commentary on how this is a tax hike spreading through the economy?"
To be fair, this is a year on year comparison. Gas prices are down year-over-year. It's still yet to be seen how much worse the current rise is than the normal seasonal affect.
In my situation, I am driving much more than last year. After being laid off from a job just down the road I had to expand my search options and now drive 74 more miles each day than I did last year. Are there enough of us out there that it would make a difference?
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