The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through March.
Travel on all roads and streets increased in March. The 12-month moving average was up month-over-month by 0.1% and was up 0.3% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.0% MoM and down 0.8% YoY.
Here's a detailed map of regional driving:
Source: https://www.fhwa.dot.gov/policyinformation/travel_monitoring/22septvt/22septvt.pdf
Here is a chart that illustrates this data series from its inception in 1971. It illustrates the "Moving 12-Month Total on ALL Roads," as the DOT terms it. As we can readily see, the great recession had a substantial impact on our driving habits, but habits bounced back over the next five or so years, until the COVID pandemic. The decline in driving was most likely related to the cost of gasoline during that time period (see fourth chart below).
The rolling 12-month miles traveled contracted from its all-time high for 39 months during the stagflation of the late 1970s to early 1980s, a double-dip recession era. But -- the COVID pandemic had a much greater impact on driving as Americans stayed home for work, meals, and entertainment. It was the largest and steepest decline in the history of this data set.
Vehicle Miles Traveled: The Population-Adjusted Reality
Total miles traveled, however, is one of those metrics that should be adjusted for population growth to provide the most meaningful analysis, especially if we want to understand the historical context. We can do a quick adjustment of the data using an appropriate population group as the deflator. Let's use the Bureau of Labor Statistics' Civilian Noninstitutional Population Age 16 and Over (FRED series CNP16OV). The next chart incorporates that adjustment with the growth shown on the vertical axis as the percent change from 1971.
Clearly, when we adjust for population growth, the miles-traveled metric takes on a weaker look. The nominal 39-month dip that began in May 1979 grows to 61 months, slightly more than five years. The trough was a 6% decline from the previous peak. The COVID recession and its impact on driving still looks dire when adjusting for population. We would estimate the number of months from peak to peak, but we still haven't reached pre-pandemic driving levels... and may never again!
About that population adjustment…
Why use the CNP16OV data for the population adjustment? Wouldn't it make more sense to limit the population to licensed drivers? The correlation between license holders and actual drivers is far from reliable. Many license holders in households do not drive, especially in their older years. According to Census Bureau data on gasoline sales, dollars spent on gasoline peaks for people in their late 40s and falls off rather quickly after that.
In fact, there's a good case for using the Census Bureau's mid-month estimates of total population (POPTHM) rather than civilians age 16 and over for the population adjustment. The reason is that a portion of total miles traveled is specifically to support children's needs (daycare, schools, children's activities, etc.) and the needs of elders who might have licenses but no longer drive. Ultimately the division of miles traveled by either population group (CNP16OV or POPTHM), while not a perfect match with drivers, is a consistent and relevant metric for evaluating economic growth.
Here is the same population-adjusted chart, this time with the total population for the adjustment. In the total population-adjusted version, the latest data point is 5.64% off-peak. This population-adjusted version puts us at a level we first achieved in 1999.
The Role of Gas Prices on Vehicle Miles Traveled
What about the impact of volatile gasoline prices? How much of a factor has that been in the trend? Here is an overlay of the population-adjusted miles traveled and real (inflation-adjusted) regular gasoline prices since the early 1990s.
For a closer look at the volatility of gasoline prices, check out our Weekly Gasoline Price Update.
In the big picture, there are profound behavioral issues apart from gasoline prices that are influencing miles traveled. These would include the demographics of an aging population in which older people drive less, the ability to work remotely, and the use of ever-growing communication technologies as a partial substitute for face-to-face interaction.
Miles traveled and gasoline prices
The DOT "miles traveled" metric is also interesting to study in the context of gasoline volume sales, which we previously updated monthly however the last published data from the EIA for gasoline volume sales was March 2022, with no update on the next release date: Gasoline Volume Sales, Demographics and our Changing Culture.
See also the latest update in the excellent analysis by Paul Hodges of the correlation between miles traveled and gasoline prices: Americans Drive Less as Auto Market Demand Patterns Change.
ETFs associated with gasoline include: United States Gasoline Fund LP (UGA).
This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at VettaFi | Advisor Perspectives
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