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We're buying fewer new autos and light trucks per mile traveled. (As a side note, we're currently above trend. One wonders how long that will last.)
Click to enlarge.
We're also traveling fewer miles.
So what could this combination mean long-term?
Source Data:
St. Louis Fed: Custom Chart
St. Louis Fed: Total Vehicle Miles Traveled
9 comments:
The best explanation I've read is that the recession a) killed a lot of optional business travel and b) encouraged more use of telecommuting.
The downtrend is longer than the recession so maybe we are also communicating with friends more on FaceBilk instead of in person.
Maybe a little savings from better fuel efficiency.
I think there are many dynamics at work.
Vehicles last longer: 100 to 150K is pretty standard out of a moderately maintained car.
Miles driven are down, vehicle life expectancy is up.
Fuel economy is also better, but I don't think that factors in here.
JzB
Mr Slippery,
I think there are many dynamics at work.
Indeed.
There's the rise of nonstore retailers.
100 people buying from Amazon could mean 1 delivery truck to service them.
100 people buying from the malls means 100 people driving to malls, and back!
Meanwhile, malls higher fewer workers in response, meaning fewer employees drive to malls, and so on.
Sigh.
And then there are Troy's comments about World of Warcraft vs. bowling. Playing a video game at home requires no travel. For most, bowling requires a trip in one's car.
Scott,
I hear you.
My first car was a hand me down. It was a 1976 Volare. After 10 years the hood started rusting through.
I can't see any rust on my 1996 Camry. It's been 16 years. Still feels like a new car for the most part. I expect to get another 10 years out of it, at least.
Jazzbumpa,
I think you are right.
If anything, I think better fuel economy is currently being swamped by rising gasoline prices. That gas pump price shock can get people to drive less. We'll see if it reverses if prices come down.
Then again, if prices come down it is probably only due to a slowing economy (and not a renewed sense of prosperity optimism).
I would also add that better fuel economy is probably boosting sales more than they otherwise would be, at least in the short-term.
That could explain why we are above the trend line in the first chart.
I don't think the sales are sustainable though. It's not like you can justify buying a new car every few years just because the new car gets a bit better gas mileage.
Demographics
I believe the avg. age is rising. Between 70 to 75 years of age the number of fatalities of drivers rises considerably compared to younger age groups of drivers.
I would think that people are aware of this, and they would do everything possible to assist this age group to drive less.
This could be taking some drivers off the road.
This plus convenience shopping, longer lasting vehicles, and the recession could be some factors in the decrease shown in the graph.
Anonymous,
Perhaps even traffic congestion plays a part. Hard to total a car when one is stuck in traffic.
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