Traffic Volume Continues To Drop in November; New Record: An Annual Decline of -112B Miles

The Federal Highway Administration reported today (direct link here) that travel during November 2008 on all U.S. roads and streets fell by -5.3% compared to November 2007. This drop marks the thirteenth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through November 2008 also fell by -3.7% compared to 2007.

The thirteen consecutive monthly declines (November 2007 through November 2008) in miles driven compared to the same month in the previous year represents one of the most significant adjustments to driving behavior in American history.

On a moving 12-month total basis, traffic volume in November fell to 2,894 billion miles, the lowest level in almost five years - since January of 2004 (see chart above), and this measure of traffic volume fell in every month of 2008.

Bottom Line: The moving 12-month total traffic volume in November 2008 (2,894 billion miles) is below the November 2007 level (3,006 billion miles) by 112 billion annual miles driven, the largest annual decline in FHA history (data go back to 1971). At an average fuel efficiency of 20 m.p.g., and an average gas price of $3.39 per gallon over that period (data here), that reduction in miles driven represents an annual savings of almost $19 billion for American consumers and businesses.

That's in addition to the much larger $325 billion estimated annual savings for consumers and businesses from the drop in gas prices from $4.12 per gallon to $1.82 since July (gas price data here), since American consumers and businesses save about $1.42 billion annually for every penny decrease in gas prices (see calculation here).

GM: Borrowing at 8%, Lending at 0%

ASSOCIATED PRESS (12/30/2008) — General Motors said it will offer financing as low as 0% for several 2008 and 2009 models as the automaker makes a big year-end push to improve sales.

The news comes a day after its troubled lending unit, GMAC Financial Services, agreed to take a $5 billion loan from the Treasury Department. GM said it will offer 0% financing for up to 60 months on the 2008 Chevrolet TrailBlazer, GMC Envoy and Saab 9-7X sport utility vehicles through GMAC. The Saab 9-3 and 9-5 sedans also qualify for zero-percent financing. The carmaker is also offering financing between 0.9% and 5.9% on more than three dozen other 2008 and 2009 models, including many trucks and SUVs.

Separately, GMAC said Tuesday that it will offer auto loans to customers with credit scores as low as 621, eliminating restrictions put in place two months ago that required a minimum score of 700.

Quote of the day from Jeff Macke (CNBC Fast Money contributor) via Dennis Gartman's "The Gartman Letter":

"GM has become a company that borrowed money from the U.S. government at 8% and lent it to the American public at 0%. This is not a model we would like to build upon.”

MP: And GMAC lowered credit standards at the same time it offered 0% financing.

The Model of the Future: Convenient, Affordable Healthcare and Plenty of Jobs

The chart above (click to enlarge) shows the annual percent growth in monthly employment (from the same month in the previous year) since 2004, comparing growth in the health care sector to the growth in overall total employment. Even during the recession, health care employment continues to grow at almost 3% annually, and there was an increase of 371,600 health care jobs in 2008. In contrast, overall job growth has been negative and falling since mid-2008, with a total job loss in 2008 of almost 2.6 million.

One reason for the continuing growth in health care employment might be provided in this story: "As Retail-Based Clinics Grow, So Do Jobs for Specialty Nurses":

The proliferation of health clinics in retail stores has created hundreds of job opportunities for advanced nurse practitioners — a primary-care specialty whose ranks are growing at a time when the number of family doctors continues to decline.

“I love the concept,” said advanced nurse practitioner Marina Ordiner said. “I think it’s the model of the future. It’s convenient, it’s affordable.” What she likes best is having the ability to spend more time with patients.

Interesting Charts of the Day

The chart above shows the monthly employment levels since 1969 in: a) the construction and manufacturing sectors combined, and b) government. Back in 1969, there were almost 2 manufacturing and construction jobs for every government employee. Since then, government employment almost doubled from 12 million in 1969 to almost 24 million today, as manufacturing and construction jobs have remained flat and have recently fallen, to the point that there are now more workers employed by government than are employed in the manufacturing and construction sectors. A version of this graph was posted here and here (thanks to Tim Wise).

But before getting too depressed about that trend, I decided to check something else: Government employees as a percent of total nonfarm employment, and the interesting results are presented here:

As the chart shows, there has been a general downward trend in government employees as a percent of total payrolls since the mid-1970s, from more than 19% in 1975 to below 16% by 1998, with a slight reversal of the trend since 2000.

As much as we hear about the growth in government, it seems like the jobs data tell a different story. Comment welcome.

One explanation for the top chart is that there have been so many productivity gains in manufacturing that we can produce increasingly higher levels of output over time with fewer and fewer manufacturing workers?

Trends: Laptops and Cellphones Dominate

About a month ago, it was reported that in the third quarter of 2008, sales of laptop computers exceeded desktop sales for the first time ever. A similar phenomenon has been taking place for phone preferences, as the BLS now reports that:

In 2001, the ratio of spending on residential phone services to spending on cellular phone services was greater than 3 to 1 (see chart above). In 2007, cellular phone expenditures accounted for 55% of total telephone expenditures compared to 43% for residential phone expenditures.

HT: Ben Cunningham

The Economy Is Bad, but 1982 Was Worse

I thought it would make sense to get some clearer historical perspective, and the economists at the Bureau of Labor Statistics (BLS) were nice enough to help me do so. In the last week, they helped me put together a broad measure of the job market — one including both official unemployment and more subtle kinds — stretching back to 1970. Since the job market covers the entire economy and affects families in tangible ways, it seems to be the single best yardstick.

And it shows, for starters, that the economy is not yet as bad as it was in the early 1980s. It’s not even that close to being as bad. The ranks of unemployed and underemployed, controlling for the size of the population, were much larger in 1982 than today.

I took estimates from the Labor Department and created a measure of unemployment that goes back to 1970. Including discouraged workers, the measure shows that the unemployment rate was 7.6%. Another 5.2% of the labor force was involuntarily working part time. These two groups bring the combined rate to 12.8%.

Even this is an understatement, because the Labor Department’s definition of discouraged workers is a little narrow. To be counted, somebody must have looked for a job in the last year. And there appear to be several fhundred thousand people — mostly men — who stopped looking for work more than a year ago but would gladly take a good-paying job if one came along. They would lift the rate above 13%.

As bad as the number is, it is still not that close to its 1982 peak of 16.32% (or anywhere near its Depression levels, which were probably above 30%). The early 1980s really were that bad.

~David Leonhardt in today's NY Times

MP: As I reported earlier, some of the other key differences between today and the early 1980s are:

Prime Rate
1981: 20.5%
2009: 3.25% (Current)

Inflation
1980: 14.8%
2008: 0% (December)

Unemployment Rate
1982: 10.8%
2008: 7.2% (December)

30-Year Mortgage Rate
1981: 18.5%
2009: 4.96% (Current)

Real Gas Price (2008 dollars)
1981: $3.45 per gallon
2009: $1.82 (Current)

Wheels Falling Off Global Warming Bandwagon

Over the past decade the global average temperature has fallen to its lowest levels in 30 years:

1. International Falls, Minnesota -- the coldest location in the continental United States -- set a new record in January with a low temperature of minus 40 degrees and snowfall records have recently been set in 63 U.S. locations.

2. After two years of ice-cap melting in the Arctic, an abrupt turnaround occurred in 2008, with ice forming at a record pace.

3. More and more scientists are paying attention to the evidence and rejecting the link between human actions and the recent warming trend.

"The wheels are falling off the global warming bandwagon," says H. Sterling Burnett, senior fellow with the National Center for Policy Analysis. "While climate action boosters continue to call for politicians to ignore reality -- even in the face of mounting contrary evidence against catastrophic warming -- scientists, the public and politicians are wising up."