by Bill McBride on 12/19/2014 02:12:00 PM
Friday, December 19, 2014
With lower gasoline prices, vehicle miles driven might reach a new peak in 2015.
The Department of Transportation (DOT) reported:
Travel on all roads and streets changed by 2.6% (6.6 billion vehicle miles) for October 2014 as compared with October 2013.The following graph shows the rolling 12 month total vehicle miles driven.
Travel for the month is estimated to be 264.2 billion vehicle miles.
Cumulative Travel for 2014 changed by 0.9% (23.2 billion vehicle miles).
The rolling 12 month total is slowly moving up, after moving sideways for a few years.
Click on graph for larger image.
In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.
Currently miles driven has been below the previous peak for 83 months - almost 7 years - and still counting. Currently miles driven (rolling 12 months) are about 1.6% below the previous peak.
The second graph shows the year-over-year change from the same month in the previous year.
In October 2014, gasoline averaged of $3.26 per gallon according to the EIA. That was down from October 2013 when prices averaged $3.42 per gallon.
Prices will really be down year-over-year in November and December too.
As we've discussed, gasoline prices are just part of the story. The lack of growth in miles driven over the last 7 years is probably also due to the lingering effects of the great recession (lack of wage growth), the aging of the overall population (over 55 drivers drive fewer miles) and changing driving habits of young drivers.
With all these factors, it might take a little more time before we see a new peak in miles driven - but it is possible that a new peak could happen in 2015.
Posted by Bill McBride on 12/19/2014 02:12:00 PM