Here’s a Good Sign for the Economy: Americans Are Hitting the Road
Driving is as American as apple pie, but the Great Recession took a big bite out of the nation’s driving habits. Total miles driven in the U.S. hit a peak in the fall of 2007 just before the recession hit and fell for several years after. Total miles driven bottomed out in 2011, moving slowly higher since then.
The Department of Transportation reported this week that total miles driven has hit a new, all-time high. Vehicles drove 7.3 billion miles in May, up 2.7 percent from May, 2014. The annual number is even more impressive: Using a moving 12-month figure, total miles traveled in the past year registers at 3.08 trillion miles. This graph from Calculated Risk paints the picture:
This sure seems like good news for the U.S. economy. The data for miles driven reflects booms and busts in the economy, and seeing the numbers climb suggests the economy is still gaining strength.
However, the raw numbers may not be quite as good as they first appear. Even though miles driven are up, so is the U.S. population. Once the data is adjusted for population growth, a less robust picture emerges. Doug Short at Advisor Perspectives ran the numbers, concluding that on a per capita basis, miles driven is still well below its pre-recession peak. Here’s his chart:
It looks like the U.S. economy still has a long way to go to get back to its pre-recession strength, at least as measured by by the rough proxy of total miles driven.
It’s Official: No Government Shutdown – for Now
President Trump signed a short-term continuing resolution today to fund the federal government through Friday, December 22.
Bloomberg called the maneuver “a monumental piece of can kicking,” which is no doubt the case, but at least you’ll be able to visit your favorite national park over the weekend.
Here's to small victories!
Greenspan Has a Warning About the GOP Tax Plan
The Republican tax cuts won’t do much for economic growth, former Federal Reserve Chair Alan Greenspan told CNBC Wednesday, but they will damage the country’s fiscal situation while creating the threat of stagflation. "This is a terrible fiscal situation we've got ourselves into," Greenspan said. "The administration is doing tax cuts and a spending decrease, but he's doing them in the wrong order. What we need right now is to focus totally on reducing the debt."
The US Economy Hits a Sweet Spot
“The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year,” The Wall Street Journal reports. But the milestone was reached, in part, because the Congressional Budget Office has, over the last 10 years, downgraded its estimate of the economy’s potential output. “Some economists think more slack remains in the job market than October’s 4.1% unemployment rate would suggest. Also, economic output is still well below its potential level based on estimates produced a decade ago by the CBO.”
The New York Times Drums Up Opposition to the Tax Bill
The New York Times editorial board took to Twitter Wednesday “to urge the Senate to reject a tax bill that hurts the middle class & the nation's fiscal health.”
Using the hashtag #thetaxbillshurts, the NYT Opinion account posted phone numbers for Sens. Susan Collins, Bob Corker, Jeff Flake, James Lankford, John McCain, Lisa Murkowski and Jerry Moran. It urged readers to call the senators and encourage them to oppose the bill.
In an editorial published Tuesday night, the Times wrote that “Republican senators have a choice. They can follow the will of their donors and vote to take money from the middle class and give it to the wealthiest people in the world. Or they can vote no, to protect the public and the financial health of the government.”
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Can Trump Succeed Where Mnuchin and Cohn Have Flopped?
President Trump met with members of the Senate Finance Committee Monday and is scheduled to attend Senate Republicans’ weekly policy lunch and make a personal push for the tax plan on Tuesday. Will he be a more effective salesman than surrogates in his administration?
Politico’s Annie Karni and Eliana Johnson report that both Democrats and Republicans say Mnuchin and chief economic adviser Gary Cohn have repeatedly botched their tax pitches, “in part due to their own backgrounds” as wealthy Goldman Sachs alums. “House Speaker Paul Ryan earlier this month asked the White House not to send Mnuchin to the Hill to talk with Republican lawmakers about the bill, according to two people familiar with the discussions — though Ryan has praised the Treasury secretary’s ability to improve the legislation itself,” Karni and Johnson write.