Wednesday, March 02, 2011

Traffic Volume Increases in Dec. for Seventh Month

The Federal Highway Administration reported today that travel on all roads and streets in the U.S. for the month of December was estimated at 243.4 billion vehicle miles, which is 0.6% above the same month last year, and almost 2.6% higher than the traffic volume in December 2008.  What makes those December traffic increases especially noteworthy is that the price of gas in December last year averaged $2.99 per gallon, which was almost 15% above the December 2009 price of $2.61, and 77% above the December 2008 price of $1.69 (data here). Consumers and commercial drivers appear to be able to absorb the higher gas prices and still continue to increase driving as the economic recovery strengthens.  In fact, traffic volume in December 2010 set a new record for monthly vehicle-miles of travel in that month.

The December traffic increase from its year ago level was the seventh consecutive monthly increase starting in June 2010, and the eighth increase in the last nine months starting in March 2010.

On a moving 12-month total basis (to smooth out the monthly seasonal variations), the annual vehicle-distance traveled through December 2010 was 3,000 billion miles, the highest 12-month total since July 2008, almost two and-a-half years ago (see chart above).

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 and truck tonnage post here).  The ongoing improvements in traffic volume since the summer of 2009, which is taking place despite rising gas prices, indicate that the economic recovery is real, sustainable and gaining momentum.


At 3/02/2011 6:00 PM, Anonymous Anonymous said...

Here’s a different look at USA air and road travel data. I use 2005 as the reference year (2,990 billion road travel miles and 547 million air travel miles) and expect travel miles to increase by 1% per year in parallel with our population increases. Adjusting for population increases improves the value of trend comparisons.

Road Travel Miles:
2006: 0.8% below expected
2007: 0.7% below expected
2008: 4.8% below expected
2009: 5.8% below expected
2010: 4.5% below expected

Domestic Air Travel Miles:
2006: 0.3% below expected
2007: 1.6% ABOVE expected
2008: 3.4% below expected
2009: 9.3% below expected
2010: 7.8% below expected

Travel miles fell as the recession worsened, and were at their nadirs in 2009. Travel miles increased in 2010 but still have long ways to go before reaching population-adjusted, pre-recession values.

At 3/02/2011 6:58 PM, Blogger Benjamin Cole said...

Dudes: Switch out to natural gas.

From the WSJ today:

NEW YORK—The U.S. is inundated in natural gas, and the glut may not ease any time soon.

Domestic production last year hit its highest level in almost 40 years, and 2011 will likely see another year of strong production. That means another year of subdued electricity prices and pressure on drillers' bottom lines as well as a powerful incentive for companies and other consumers to switch to the heating fuel.

Production of natural gas in the U.S. grew for a fifth consecutive year in 2010, and was the highest since 1973, the Energy Information Administration said Monday. Rising output from newly profitable shale-rock formations across the U.S. has surpassed many industry observers' expectations, and the U.S. produced 21.57 trillion cubic feet of consumer-grade natural gas during the year, just short of the 1973 record of 21.73 tcf.

With no way to export large quantities of gas and a drilling boom fueled by easy availability of credit and widespread international interest in U.S. gas assets, the glut is seen continuing through 2011.


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