The Great Driving Reduction: Consumers Spend Less on Gas, With No New Legislation

According to data released yesterday from the Federal Highway Administration, travel on all roads and streets in the United States fell by -1.2% in March 2009 compared to March 2008. This marks the 17th consecutive month of traffic volume decline (starting in Nov. 2007) compared to the same month in the previous year. The moving 12-month total for traffic volume has fallen now for 16 consecutive months, going back to December 2007 (see chart above).

The 12-month moving total for March is the lowest traffic volume (2,914 billion miles) in any month since February 2004 (see red line on the chart above, click to enlarge).

WASHINGTON -- President Barack Obama is asking consumers to put their money -- up to $1,300 per new vehicle by 2016 -- behind his plan for higher efficiency standards for cars and trucks and tougher rules on their greenhouse gas emissions.

In return, Obama said Tuesday in unveiling the plan, drivers would make up the higher cost of more fuel-efficient, cleaner vehicles by buying less gas at the pump. It would take just three years to pay off the investment and would, over the life of a vehicle, save about $2,800 through better gas mileage, the president said.

It seems like consumers have already decided on their own that voluntarily buying less gas at the pump can be in their own self-interest, and are now driving the same number of miles as they were five years ago, even with more cars and more drivers. Without stricter CAFE standards, consumers on their own have been driving less, have been buying less gas at the pump, and in the process have reduced greenhouse gas emissions.

Comments

[PastTense:]

Consumers are spending less on gas because of the bad economy. So you don't think the economy will ever recover?

May 21 04:16 AM

[33Nick:]

Brilliant. Does this mean consumers are taking things into their own hands and not surrendering to what politicians think is right for them? Striking!

Ultimately, consumers have the real power in something as innocent as a rectangular plastic card called, the credit card. By choosing not to consume, it sends a much bigger and stronger warning than having to be forced by laws that never fully answer the underlying problem.

Great point.
The Electricnick.com team.

May 21 02:18 PM

[tuj:]

And yet last year you said we had to "drill, drill, drill!" to lower prices.

seekingalpha.com/artic...

You also said gas prices weren't too high; that "too high" would be $14-17 dollars. And that $3.56/gal gas was a bargain; I hope you hedged forward at that price.

seekingalpha.com/artic...

seekingalpha.com/artic...

May 21 02:21 PM

[TinyTim:]

Surprised??
No job, no commute, no mileage

May 21 03:44 PM

[FDNY RET:]

You have failed to take into account the impact of just the words of the "The Great Anointed One" even projected years into the future on his auto fuel consumption edict.

Just the knowledge that The great Obama-mamma has interest in the subject has driven fuel spending to it's knees. May Allah be praised!.

May 21 03:52 PM

[BrotherMaynard:]

i think there is the realization (after living through $4 gas) that owning a gas guzzling car is potentially a huge liability. People can't control the economy/employement picture, but they can control the potential amount of $ they spend on gas by driving less and/or demanding efficiency.

In my opinion, that memory will be hard to erase and as a result, demand has permanently shifted.

May 21 05:02 PM

[whisperonth...:]

Tiny Tim has it right. In Michigan, the 12.9% unemployment rate (soon to be higher due to the Obama-forced bankruptcy and the closures of dealerships and all the jobs that depend on the expenditures once made by those soon to be unemployed people) is having a very big effect on how many miles we're driving. Or bussing. Whole car pools were eliminated. We don't even have to drive to the unemployment offices anymore, and with the shortage of jobs available, most of us can't even get an interview to which to drive (and even a lot of those are starting with telephone interviews to screen out the 'waste of my time' candidates).

The current demand is for jobs. THEN we'll worry about oil prices.

May 22 05:32 AM