Courtesy of Doug Short.
The Depart of Transportation’s Federal Highway Commission has released the latest report on Traffic Volume Trends, data through January. Travel on all roads and streets changed by 1.6% (3.5 billion vehicle miles) for January 2012 as compared with January 2011. The 12-month moving average increased by 0.10%, which is the second month of increase after nine consecutive months of decline (PDF report).
Here is a chart that illustrates this data series from its inception in 1970. I’m plotting the “Moving 12-Month Total on ALL Roads,” as the DOT terms it. See Figure 1 in the PDF report, which charts the data from 1987. My start date is 1971 because I’m incorporating all the available data from the DOT spreadsheets.
The rolling 12-month miles driven contracted from its all-time high for 39 months during the stagflation of the late 1970s to early 1980s, a double-dip recession era. The most recent dip has lasted for 50 months and counting — a new record, but the trough to date was in November 2011.
The Population-Adjusted Reality
Total Miles Driven, however, is one of those metrics that must be adjusted for population growth to provide the most revealing analysis, especially if we’re trying to understand the historical context. We can do a quick adjustment of the data using an appropriate population group as the deflator. I 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-Driven metric takes on a much darker 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 population-adjusted all-time high dates from June 2005. That’s 79 months — over 6 1/2 years. The January 2012 data is the lowest reading since the all-time high, 8.4% below the 2005 peak. Our adjusted miles driven based on the age 16-and-older cohort is about where we were as a nation in May 1995.
About that Population Adjustment…
I’m frequently asked why I use the CNP16OV data for the population adjustment, often with the suggestion that it would make more sense to limit the population to licensed drivers. For openers, I don’t know of a valid source for the driver-licensed population. Moreover, the correlation between license holders and actual drivers is not a reliable one. Many license holders in households do not drive, especially in their older years. According to Census Bureau data on gasoline sales (courtesy of Harry Dent’s research on demand curves), dollars spent on gasoline peaks for people in their late 40s and falls off rather quickly after that.
In fact, I think there’s a stronger 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 driven is specifically to support children’s needs (day care, schools, children’s activities, etc.) and the needs of elders who might have licenses but no longer drive. Ultimately the division of miles driven by either population group (CNP16OV or POPTHM), while not a perfect match with drivers, is a consistent and relevant metric for evaluating economic growth.
In closing, here is the same population-adjusted chart, this time with the total population for the adjustment. Note that the possible trough in November requires two decimal places to become visible. One small but hopeful difference in the total-population adjusted version is that the trough for the current decline may have occurred in November 2011 at -7.30% versus the latest -7.22%
