Click to enlarge.
The exponential growth (red trend line) that we've seen in this recovery's automobile repair and maintenance employment failed one year ago. It would seem that the era of pent-up demand for automobile repair and maintenance has come to an end.
This is just one more indication that the party is winding down again, not that many seem to notice or care. Unless we can figure out a way to throw ourselves another epic Y2K party, I would find it very hard to believe that this economy can unexpectedly accelerate to the upside from here. We don't even have the strength needed to make it back to the trough of the dotcom bust apparently.
And on that note, heaven help us if we do indeed accelerate. As seen in the chart, up isn't the only direction possible. In fact, down happens at least as often.
I looked on outta the window and I started countin' phone poles, goin' by at the rate of four to the seventh power. Well I put two and two together, and added twelve and carried five; come up with twenty-two thousand telephone poles an hour.
I looked at Earl and his eyes was wide, his lip was curled, and his leg was fried. And his hand was froze to the wheel like a tongue to a sled in the middle of a blizzard. I says, "Earl, I'm not the type to complain; but the time has come for me to explain that if you don't apply some brakes real soon, they're gonna have to pick us up with a stick and a spoon."
Well, Earl rared back, and cocked his leg, stepped down as hard as he could on the brake, and the pedal went clean to the floor, and it stayed right there on the floor. He said it was sorta like steppin' on a plum.
I looked at Earl and his eyes was wide, his lip was curled, and his leg was fried. And his hand was froze to the wheel like a tongue to a sled in the middle of a blizzard. I says, "Earl, I'm not the type to complain; but the time has come for me to explain that if you don't apply some brakes real soon, they're gonna have to pick us up with a stick and a spoon."
Well, Earl rared back, and cocked his leg, stepped down as hard as he could on the brake, and the pedal went clean to the floor, and it stayed right there on the floor. He said it was sorta like steppin' on a plum.
Source Data:
BLS: Employment
St. Louis Fed: Vehicle Miles Traveled
How much of this is cars getting more reliable? Sideways seems to be the new normal as seen in the 04-07 period when there was plenty of HELOC cash flying around to fix whatever ailed the jalopy.
ReplyDeleteThe 2011-13 ramp in the chart probably reflects the rapid aging of the fleet as new car purchases stayed well below the old normal after 2007. Average age is now probably starting to level off as new car sales are almost back to pre crash levels.
What is the average annual miles driven per car these days? My memory says it used to be about 12K miles, if true, that says the average car needs about 72 minutes of maintenance labor per year. That sounds low to me.
Equityval,
ReplyDeleteHow much of this is cars getting more reliable?
I think the overall trend down can be explained by this, but not the short-term fluctuations.
Sideways seems to be the new normal as seen in the 04-07 period when there was plenty of HELOC cash flying around to fix whatever ailed the jalopy.
In a perfect world, sideways should be the normal. That said, perhaps that extra cash was flying into replacing the ailed jalopy in 04-07 or was instead being diverted into the housing bubble. Or perhaps too much money/time was being spent on maintenance heading into the dotcom crash (seems less likely).
The 2011-13 ramp in the chart probably reflects the rapid aging of the fleet...
I strongly suspect it was mostly just a rebound in maintenance demand from the lows of the Great Recession. It's easy to postpone an oil change as one enters the unemployment line. Once employment picked up, so too maintenance.
What is the average annual miles driven per car these days?
Vehicle miles per capita is roughly 9,400. It's fallen from the pre-bubble peak of around 10,000.
That sounds low to me.
6 minutes per thousand miles seemed low to me too. I double-checked the math. Can't spot an error (isn't proof there isn't one though).
1. It doesn't factor in supervisor work (just "production and nonsupervisory"). That could add time.
2. There are a lot of retail auto parts shops. Perhaps there are a lot of do-it-yourself mechanics out there (heavy mileage long-haul independently owned truck drivers in particular).
Best to think of the 6 minutes as a proxy. It was my intent to spot the business cycle with this post. I think it shows that the pent-up demand caused by the Great Recession is over (in regards to auto maintenance anyway).