by Bill McBride on 1/20/2010 02:25:00 PM
Wednesday, January 20, 2010
With oil prices near $80 per barrel, I've started looking for signs of demand destruction (see: Oil Prices Push Above $81 per Barrel). One of the key signs in early 2008, was the sharp drop in miles driven in the U.S.
So far miles driven (through November) are up slightly year-over-year. The Department of Transportation (DOT) reports:
Travel on all roads and streets changed by +1.4% (3.2 billion vehicle miles) for November 2009 as compared with November 2008. ... Cumulative Travel for 2009 changed by +0.3% (7.6 billion vehicle miles).Click on graph for larger image in new window.
The first graph shows the rolling 12 month of U.S. vehicles miles driven.
By this measure (used to remove seasonality) vehicle miles declined sharply in 2008, and have been increasing slowly in recent months.
The second graph shows the comparison of month to the same month in the previous year as reported by the DOT.
As the DOT noted, miles driven in November 2009 were 1.4% greater than in November 2008, however miles driven are still down 3.9% compared to November 2007.
So far miles driven is not showing any evidence of demand destruction for oil, but the slow increase in miles is suggesting a sluggish recovery.