The Great American Driving Reduction Continues

According to data recently released from the Federal Highway Administration, travel on all roads and streets in the U.S. fell by -3.1% in January 2009 compared to January 2008. This marks the 15th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The 12-month moving total for traffic volume has fallen for 14 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for January is the lowest traffic volume (2,916 billion miles) in any month since February 2004. Further, the 110 billion mile reduction in the 12-month moving total since January 2008 (3,026 billion), represents about a $16 billion reduction in fuel costs for American drivers, at an average fuel efficiency of 23 m.p.g., and an average fuel cost of $3 in 2008.

Thanks to John Thacker, who comments that, "As the great driving reduction proceeds in its second year, it shows no particular signs of slowing. The 12-month moving total of Vehicle Miles Traveled is now below that of March 2004, with a larger population and number of vehicles."

Comments

[whisperonth...:]

I'm still driving just the same as I was before, to work and back every day, out for dinner just as often, shopping twice a week, and still getting 35 mpg or better in my little foreign car. A full tank lasts two weeks for me, but if I drove the same in a mid-sized van or pickup, I'd be filling up at least every week. So maybe instead of driving less, more people are driving smaller, more fuel efficient cars. Or maybe it's just all those people on unemployment not driving anywhere.

Mar 21 10:34 PM

[a. palmer jr.:]

Remember what happened in the eighties when we first tried the fuel efficient cars. The oil producing countries actually raised the price of oil because we weren't using enough!
I don't think that is the case now. A few of us are lucky enough to still have a job and we do drive to work. Ask the people in tent city how many miles they drove this year so far, or how many times they ate out.

Mar 22 09:16 AM

[investor88:]

Great research numbers just to temper the bulls who believe a trillion dollar injection here and there, QE will solve all our problems and back to good old times. We have to get through this rough patch.

Mar 22 09:33 AM

[Ferdinand E...:]

This is a simple but very valuable article. It deserves the widest possible attention, because some of the colleagues have a tendency to ignore the numbers when they sound off about this problem.

Mar 22 10:21 AM

[The Greates...:]

One way to measure this depletion of wealth is by looking at the long-term value of the US dollar, which affects everyone, not only investors. I believe that the best way to look at the dollar's long-term decline is not by comparing its value to other declining currencies, but versus the value of gold.
Since 2000, the US dollar has depreciated against gold by an average of 16.3% annually. In the past three years, versus gold all holders of US dollars have suffered a 60% erosion of their wealth. That's before taxes and that's not counting any investment losses. Maybe this is why we are not driving, people drive only for work if they are lucky enough to still have a job.

Mar 22 10:45 AM

[erewhonman:]

Why not superimpose the price of gasoline onto your miles driven chart. Now if you charted miles driven in China you might see something a little different. Something else. Miles driven is not a measure of degree of civilization or enlightenment.

Mar 22 10:45 AM

[petyaczar:]

Economics, Supply and demand, Demand = f(supply/price), enlightened self interest, NO FEDERAL MANDATES required, no obamanation intervention required, just the free market at work.

AMAZING isn't it?

ROFLMAO = why is this such a startling revelation to so many people?

Mar 22 10:46 AM

[The Greates...:]

I leave you now with this thought, all the big bail outs are going to the big name finical institutions on Wall Street, the working class (middle) got to keep a little more of their checks. But that working class is shrinking everyday due to job loss. Job loss floods the job market, lowing working wages because of the competition in the labor fields, benefiting the larger companies that do hire. (Lower wages means a bigger bottom line) So, if your big enough, it is a win, win situation all around. An also hard time squeezes out competition, creating more monopolies in big business. The consumer loses all the way around, write, call, email and fax your representative today, let them know your watching. Have a nice day.

Mar 22 10:52 AM

[The Greates...:]

Have you heard about the new VMT (Vehicle Mileage Tax) idea that is being studied right now. With GPS your government will be monitoring the mileage you drive and install a tax on those miles. Big Brother is closer then you think.

Mar 22 10:54 AM

[Danny Newton:]

I think the problem is understated. Since data was first collected on this phenomenon, there has been no downturn in vehicle miles traveled to equal this one either in severity or length of time. Part of the reason is baby boomer retirements. This decline can not be interpreted as a switch to public transit because there is not enough of it to equal this massive decline. Ironically, in bad economic times, transit takes hits in service area and availability too. You may see more people on the bus but there is very likely to be fewer busses running.

The system of collecting data for VMT is greatly improved because of changes in federal to state reimbursement is based on a complicated formula that uses the number of vehicle miles traveled. The decline in vehicle miles travel was foreseen several years ago by the Federal Highway Administration and is available as a study on the web. It says nothing about a decline because of an economic turndown based on toxic assets however.

Ironically, some of the dreams that public transportation, or train service improvements to "take cars off the road or take trucks off the road" will result in lower reimbursement to the states from the Highway Trust Fund.

Mar 22 11:11 AM

[Paul Killinger:]

Not as many people driving to work, not as many folks driving for leisure. Makes perfect sense to me. Not until these numbers turn up will we experience any meaningful sort of economic recovery.

Mar 22 12:03 PM

[kruser53:]

Paul Killinger:

You have the right idea. Miles driven would probably be a good economic indicator for this cycle. It's probably a coincident indicator, with miles driven and economic activity increasing at about the same time.

Mar 22 04:21 PM

[LKofScotland:]

Don't know what miles driven in an automobile has to do with ecnomic recovery. vast majority of people (by definition) live in cities so if they simply decide to subsitute through the use of public transportation could be a permanent change. just as importantly is the rise of Wal-mart which means one stop shopping for basically "all your needs" in the world of car culture. very interesting article. will be especially interesting to see if it causes the price of oil to decline at some point. so far not so good which really bodes ill for current economic policies.

Mar 22 05:47 PM

[BrotherMaynard:]

fyi...you put up the chart that shows "through Jan 2008"

Mar 22 08:25 PM

[Jade Queen:]

Another interesting statistic would be motorcycle and scooter sales. Companies selling these have been very busy where I live, and there seem to be increases in the spandex, hard-body, no-motor crowd as well. I read a whiny blog entry about a guy who had to bike when gas was so high. Then he got addicted to the adrenaline and the better body. When gas came down, he kept biking. Maybe there is sort of a kick-in lag. If gas had been high for a short enough time, people wouldn't have turned into adrenaline junkies. It's all very interesting, and it could be that there are different statistics on this in different locales.

Mar 22 09:11 PM

[mikejack:]

This also has implications for the auto industry and repair parts suppliers. Fewer miles driven translate into less demand for new vehicles (at least for people who sell/trade their vehicle after say, 100,000 miles) and less demand for spare parts (for example, new tires).

Mar 23 11:44 PM