Sunday, January 24, 2010

Traffic Volume: Largest 6-Month Increase in 5 Yrs.

The chart above shows the percent change in U.S. traffic volume through November (from the same month in the previous year), in a report released recently by the Federal Highway Administration (data and report here). After falling for 17 consecutive months starting in November 2007 and continuing through March 2009, traffic volume has increased in five out of the last six months (see chart above). The cumulative six-month June-November increase of 7.8% is the largest 6-month increase since the 11.6% increase through July 2004, more than five years ago.

The chart below displays traffic volume as a moving 12-month total, showing a similar pattern to the percentage monthly increase above. After falling for 16 straight months from December 2007 to March 2009, the moving 12-month total has increased six out of the last eight months, and the June-November increase marks the largest 6-month increase in traffic volume (12-month total) since the summer of 2007.
In a related report, "the American Trucking Associations’ Truck Tonnage Index (seasonally adjusted) increased 2.7% in November, following a 0.2% contraction in October. The latest gain boosted the index from 103.6 (2000=100) in October to 106.4, its highest level in a year (see chart below). Compared with November 2008, SA tonnage fell 3.5 percent, which was the best year-over-year showing in twelve months. In October, the index was down 5.2 percent from a year earlier."
MP: Two more positive signs that a V-shaped economic recovery is underway.

Update: Chart below shows that gas prices were generally increasing over the last six months, so the increased traffic volume happened in spite of rising fuel costs.


At 1/25/2010 6:26 AM, Anonymous American Delight said...

Are lower gas prices a factor?

At 1/25/2010 7:48 AM, Anonymous Anonymous said...

I don't think it is a result of gas prices. Gas prices have increased nearly $1 per gallon since last year, and diesel prices increased between 50 and 60 cents per gallon from a year ago.

At 1/25/2010 10:38 AM, Blogger John Thacker said...

Chart below shows that gas prices were generally increasing over the last six months, so the increased traffic volume happened in spite of rising fuel costs.

It's a rolling 12 month average, so the important metric for gas prices is not whether gas prices were generally increasing over the last six months, but whether they were higher or lower compared to a year ago.

The same graph demonstrates that gas prices, while lower in October (and before) than a year ago, are higher than a year ago from November on. So the December-January gains are more likely to be from the broader economy than from gas prices, but the recover in October and before had a lot to do with gas prices.

At 1/25/2010 12:04 PM, Anonymous Amin Keb said...

Well of course higher gas prices last summer explain the drastic year over year increase through October, John. This was explained every time this chart showed up since July. It falls on deaf ears.

Retail gas prices have been rising since the end of 2008 but they've been relatively flat since June 2009.

The increase in VMT is encouraging, but calling it an indicator of a V-shaped recovery is ridiculous. The 12 month rolling average shows just how far the level has dropped. This is likely a permanent structural break. The chart shows no signs of a V-shaped rise. It's more like a hockey stick - a slow recovery like nearly every "real" economist is predicting.

At 1/25/2010 12:07 PM, Anonymous Anonymous said...

Or people could be driving further for jobs...

The increase in freight tonnage for November after a contraction in October could easily be explained by holiday retail sales.

It might be beneficia to know how the freight tonnage compared to November of last year.

At 1/27/2010 1:11 AM, Anonymous Vizini said...

Great manipulation of the scale on that gas price chart. Prices rose only 8% over that period.

Zoom out to this picture and see that the recent "rise" in gasoline prices has been relatively flat:

Don't let facts get in the way of an argument!

At 1/27/2010 8:49 AM, Blogger Mark J. Perry said...

Vizini: If you click on the link above the graph, you'll see that the graph was created that way automatically by So there was no "manipulation" of the scale, at least not by me. The first comment from American Delight asked about gas prices, and I found that graph to help answer the question.

And most graph programs focus in on the relevant range of data by default, so the GasBuddy graph is fairly standard.


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