Wednesday, October 20, 2010

U.S. Traffic Volume Reaches 2-Year High in August

The Federal Highway Administration reported today that travel on all roads and streets in the U.S. increased by +1.6% in August 2010 compared to the same month last year. Total travel for the month of August was estimated at 267.4 billion vehicle miles, the second highest travel volume for the month of August, just 0.50% below the all-time August record in 2007 of 268.7 billion miles.  The August increase in traffic was the third consecutive monthly increase, and the fifth increase in the last six months. 

On a moving 12-month total basis, the annual vehicle-distance traveled through August was 2,987 billion miles, the highest 12-month total since August 2008, two years ago (see chart).

Following a sharp decline in U.S. traffic volume (moving 12-month basis) that started in late 2007 and ended at a cyclical low in May 2009, traffic volume has been gradually increasing as both personal and commercial travel on U.S. roads and highways have rebounded (see graph above).  Note that the cyclical pattern of traffic pattern over the last three years, especially the sharp decline from late 2007 to May 2009, coincided almost perfectly with the official U.S. recession period from December 2007 to June 2009 (shaded area in graph).  The sustained and ongoing improvements in vehicle miles since the summer of 2009 indicate that the U.S. economy is recovering gradually, and weakens the chances of a double-dip recession.  

In contrast, Nouriel Roubini still expects a 35-40% chance of a double-dip.     


At 10/21/2010 10:33 AM, Blogger Hydra said...

Lots of environmentlaists would like to reduce auto miles driven. Some advocate a tax on VMT.

How are they oing to reduce miles traveled without affecting the economy, if the two are closely linked?

At 10/21/2010 9:18 PM, Blogger VangelV said...

Sorry Mark but the data clearly shows that we are at 2005 levels, hardly a case for optimism. Given the fact that the easy oil has been found and that depletion is running at more than 6% there will be little chance in exceeding the 2008 high and staying there in the near future.

Of course, if you expect demand to go up again to the previous highs you better be ready for $150 oil once again.

At 10/21/2010 9:58 PM, Blogger Hydra said...

Vange is right.

Rich people drive and poor people walk. Until we replace oil, we can generally expect a lot more people to be walking.

But the real problem is not cars. We can live without suburbs.

But when we have people walking behind a plow instead of driving a tractor, then we have a problem.

At 10/22/2010 8:56 AM, Blogger VangelV said...

But when we have people walking behind a plow instead of driving a tractor, then we have a problem.

Nobody is talking about oil running out. As long as the market is allowed to work we will see marginal uses priced out of the gasoline and diesel markets and we will still get the food that we need.

The problem will come when the rest of the world decides that the marginal user is the American suburbanite and stops accepting USDs for oil. The farmer will not have a problem because there is a large market for what he is producing so he will be able to afford the higher priced gasoline with hard money earned in the export markets. The problem will come for the 50% of Americans that are net recipients of government largess funded by taxes levied on the productive class.

The American kleptocratic system in which the Party of Stupid and the Party of Evil rob the productive classes so that they can purchase votes from the dependent class and their political supporters will find itself unable to function as it has and will look a great deal different than it does today. I suspect that individual states will rise against the central government and begin to nullify legislation and Supreme Court decisions on the basis of the Principles of '98. As a counter we should see the rise of populist strong men who seem to have the answers and try to further concentrate power in the hands of the federal government. There will be a fierce debate where one side wishes to bring home the troops while the other tries to control sentiment by trying to start another war.

I have a feeling that the next decade will turn out to be very interesting. Buckle up.


Post a Comment

<< Home