High gas prices are keeping Americans off the roads

By Floyd Norris
Published: August 22, 2008

High gasoline prices and a weak economy have combined to persuade Americans to do something they rarely do. They are driving less.
The trend to lower driving seemed strong as this summer began, with reports of highways that were far less crowded than normal on Memorial Day, the first holiday weekend of the season. As summer nears an end, the trend seems to be stronger than ever. In the week ended Aug. 15, Americans purchased 7.8 percent less gasoline than they had in the same week a year earlier, according to MasterCard Spending Pulse. That is the biggest weekly decline of the year.
But in between those two weeks, there seemed to be reason to suspect that the effect of high fuel prices might be wearing off. The year-over-year declines began to shrink, even as gasoline prices kept rising.
Could it be that despite the weak U.S. economy and high gasoline prices, Americans were unable to part with their cars? Even if fewer Americans than ever were telling pollsters they would take driving vacations, was the lure of the car too great?
Perhaps it will turn out to be, once the economy starts to grow. But it is probably no coincidence that the relapse of conservation came after most of the tax rebate checks - the centerpiece of the government's economic stimulus package - had been sent out.

The last of those checks were sent during the week ended July 11. Gasoline prices peaked the following week, and have fallen since. But without those checks to help pay for filling the tank, Americans seem less eager to do so. Because week-to-week figures can be volatile due to weather, the accompanying chart plots the year-over-year change in gasoline prices over moving four-week periods. The peak four-week decline this year came in the week ended May 23, when the fall-off was 6.3 percent. It is now back to 4.8 percent, after dipping below 3 percent as the checks were being cashed.
The Department of Transportation has been estimating the number of miles driven by Americans on a monthly basis for more than 20 years. For most of that time, miles driven rose by 3 percent or more per year. There were more drivers using more roads and, in many cases, facing longer commutes to work.
As can be seen in the other chart, which shows year-over-year changes in miles over six-month periods, recessions have produced brief periods of slow growth in that figure. Now, however, it is declining.
In the first six months of 2008, the number of miles driven fell 2.8 from a year earlier.
Those reductions are not spread evenly across the United States, however. The larger declines have been in rural areas, part of which could be caused by a decline in vacationing, or by residents making fewer trips into town. The Transportation Department reports a 3.6 percent decline in travel on rural roads, compared with a 2.4 percent fall for urban roads.