.U.S. Motorists May Drive Less for 1st Time Since 1980 (Update2)
July 28 (Bloomberg) -- U.S. motorists, paying record prices for gasoline, drove less for a seventh consecutive month in May, pointing toward the first annual drop in road travel since 1980.
``$4 per gallon may have been the trigger point we've been looking for,'' said Kenneth McGill, managing director for travel and tourism at consulting firm Global Insight Inc. in Lexington, Massachusetts. ``It's interesting to see Americans finally reacting to the price of gasoline by rationing consumption.''
Vehicle-miles traveled on all U.S. roads fell 3.7 percent in May from a year earlier, the Federal Highway Administration said in a report today. The seven-month slide is the longest streak since 1979, agency spokesman Doug Hecox said.
Americans cut back as the average U.S. retail gasoline price reached a then-record of $3.98 a gallon on May 31. Rising fuel prices and a weak economy also marked the drop in driving in 1980, after the Soviet Union invaded Afghanistan and U.S. Embassy personnel in Iran were taken hostage.
May's travel decline pushed this year's total down 2.4 percent, according to the Washington-based highway agency, which has been reporting the data since 1942.
Driving decreased in all five regions for which the agency tallies results, led by a 4.5 percent drop in the north-central U.S., which includes Chicago. May's 254.7 billion miles driven were the lowest for the month since 2003.
Slowing Economy
The report adds to evidence of a slowing U.S. economy already beset by the worst housing market since the Great Depression. Gasoline at U.S. pumps averaged as high as $4.11 this month before slipping to $3.96 yesterday, according to motoring group AAA. Spending more on fuel leaves consumers with less for other goods and services.
``It's not only not a good summer, but probably not a good fall and there's a big question mark in 2009 also about the state of domestic travel and domestic spending,'' said Dennis Forst, a hotel and casino analyst with KeyBanc Capital Markets in El Segundo, California.
That drain on household budgets is helping damp U.S. auto demand, which Deutsche Bank AG said July 23 may shrink to 14 million vehicles this year, the fewest since 1993. First-half sales fell 10 percent, with light trucks down 18 percent.
Highway Freight
Highway freight traffic is down, too, because of the drop in auto sales and homebuilding and consumer spending that grew only a third as fast in the first quarter as a year earlier. YRC Worldwide Inc., the biggest U.S. trucking company, said second- quarter tonnage on its regional unit plunged 16 percent.
The traffic counts are compiled using cables across roadways to estimate the number of miles driven. The highway agency tracks all motorized vehicles and doesn't differentiate between commercial and passenger traffic.
``We're seeing a sustained dropoff over a prolonged period, and a significant dropoff that we expect will continue,'' Transportation Secretary Mary Peters told reporters today on a conference call.
She will outline the George W. Bush administration's proposed changes in highway funding, including greater use of private capital, in a speech tomorrow at Georgia Institute of Technology in Smyrna, Georgia. Peters has said federal gasoline taxes become less useful in paying for transportation projects as Americans drive less. Bush's term ends in January.
May's traffic decline confirms predictions from groups including AAA that Americans would drive less during the U.S. Memorial Day holiday, the traditional start of the summer vacation season.
``People were not traveling far from home,'' said Adam Weissenberg, tourism, hospitality and leisure leader at New York-based consulting firm Deloitte & Touche. ``More people were going to local beaches, local state parks, etc.''
David Ellis, a researcher at Texas A&M University's Texas Transportation Institute in College Station, said high fuel prices are more likely to curb travel when vacationers are on the road than at times of the year with fewer leisure trips.
``We're tending to cut out the leisure driving first,'' Ellis said.
Bloomberg
You did not need Bloomberg to report this, anyone driving down the street could have told you that congestion is way down, it's like someone built new highways, that fit twice the cars, yet looks the same as the old ones. At least here in Miami, as the price went up, traffic disappeared.
And yet there was some top Democrat on C-SPAN this weekend making a fool of himself saying that there was no market reasons for the drop in oil in the last few weeks, I believe it dropped from a high of 142, to something like 125, or something in the last few weeks.
The "why" is clear, the higher the price went, the fewer cars were on the road.
Every once in a while I recommend These politicians, clime down from up high in Washington, and smell the air down here on the ground.
``$4 per gallon may have been the trigger point we've been looking for,'' said Kenneth McGill, managing director for travel and tourism at consulting firm Global Insight Inc. in Lexington, Massachusetts. ``It's interesting to see Americans finally reacting to the price of gasoline by rationing consumption.''
Vehicle-miles traveled on all U.S. roads fell 3.7 percent in May from a year earlier, the Federal Highway Administration said in a report today. The seven-month slide is the longest streak since 1979, agency spokesman Doug Hecox said.
Americans cut back as the average U.S. retail gasoline price reached a then-record of $3.98 a gallon on May 31. Rising fuel prices and a weak economy also marked the drop in driving in 1980, after the Soviet Union invaded Afghanistan and U.S. Embassy personnel in Iran were taken hostage.
May's travel decline pushed this year's total down 2.4 percent, according to the Washington-based highway agency, which has been reporting the data since 1942.
Driving decreased in all five regions for which the agency tallies results, led by a 4.5 percent drop in the north-central U.S., which includes Chicago. May's 254.7 billion miles driven were the lowest for the month since 2003.
Slowing Economy
The report adds to evidence of a slowing U.S. economy already beset by the worst housing market since the Great Depression. Gasoline at U.S. pumps averaged as high as $4.11 this month before slipping to $3.96 yesterday, according to motoring group AAA. Spending more on fuel leaves consumers with less for other goods and services.
``It's not only not a good summer, but probably not a good fall and there's a big question mark in 2009 also about the state of domestic travel and domestic spending,'' said Dennis Forst, a hotel and casino analyst with KeyBanc Capital Markets in El Segundo, California.
That drain on household budgets is helping damp U.S. auto demand, which Deutsche Bank AG said July 23 may shrink to 14 million vehicles this year, the fewest since 1993. First-half sales fell 10 percent, with light trucks down 18 percent.
Highway Freight
Highway freight traffic is down, too, because of the drop in auto sales and homebuilding and consumer spending that grew only a third as fast in the first quarter as a year earlier. YRC Worldwide Inc., the biggest U.S. trucking company, said second- quarter tonnage on its regional unit plunged 16 percent.
The traffic counts are compiled using cables across roadways to estimate the number of miles driven. The highway agency tracks all motorized vehicles and doesn't differentiate between commercial and passenger traffic.
``We're seeing a sustained dropoff over a prolonged period, and a significant dropoff that we expect will continue,'' Transportation Secretary Mary Peters told reporters today on a conference call.
She will outline the George W. Bush administration's proposed changes in highway funding, including greater use of private capital, in a speech tomorrow at Georgia Institute of Technology in Smyrna, Georgia. Peters has said federal gasoline taxes become less useful in paying for transportation projects as Americans drive less. Bush's term ends in January.
May's traffic decline confirms predictions from groups including AAA that Americans would drive less during the U.S. Memorial Day holiday, the traditional start of the summer vacation season.
``People were not traveling far from home,'' said Adam Weissenberg, tourism, hospitality and leisure leader at New York-based consulting firm Deloitte & Touche. ``More people were going to local beaches, local state parks, etc.''
David Ellis, a researcher at Texas A&M University's Texas Transportation Institute in College Station, said high fuel prices are more likely to curb travel when vacationers are on the road than at times of the year with fewer leisure trips.
``We're tending to cut out the leisure driving first,'' Ellis said.
Bloomberg
You did not need Bloomberg to report this, anyone driving down the street could have told you that congestion is way down, it's like someone built new highways, that fit twice the cars, yet looks the same as the old ones. At least here in Miami, as the price went up, traffic disappeared.
And yet there was some top Democrat on C-SPAN this weekend making a fool of himself saying that there was no market reasons for the drop in oil in the last few weeks, I believe it dropped from a high of 142, to something like 125, or something in the last few weeks.
The "why" is clear, the higher the price went, the fewer cars were on the road.
Every once in a while I recommend These politicians, clime down from up high in Washington, and smell the air down here on the ground.
posted by madtom at 9:02 PM
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