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.
Coming Soon: Deductible Relief Day!
You may be familiar with the concept of Tax Freedom Day – the date on which you have earned enough to pay all of your taxes for the year. Focusing on a different kind of financial burden, analysts at the Kaiser Family Foundation have created Deductible Relief Day – the date on which people in employer-sponsored insurance plans have spent enough on health care to meet the average annual deductible.
Average deductibles have more than tripled over the last decade, forcing people to spend more out of pocket each year. As a result, Deductible Relief Day is “getting later and later in the year,” Kaiser’s Larry Levitt said in a tweet Thursday.
Chart of the Day: Families Still Struggling
Ten years into what will soon be the longest economic expansion in U.S. history, 40% of families say they are still struggling, according to a new report from the Urban Institute. “Nearly 4 in 10 nonelderly adults reported that in 2018, their families experienced material hardship—defined as trouble paying or being unable to pay for housing, utilities, food, or medical care at some point during the year—which was not significantly different from the share reporting these difficulties for the previous year,” the report says. “Among adults in families with incomes below twice the federal poverty level (FPL), over 60 percent reported at least one type of material hardship in 2018.”
Chart of the Day: Pragmatism on a Public Option
A recent Morning Consult poll 3,073 U.S. adults who say they support Medicare for All shows that they are just as likely to back a public option that would allow Americans to buy into Medicare or Medicaid without eliminating private health insurance. “The data suggests that, in spite of the fervor for expanding health coverage, a majority of Medicare for All supporters, like all Americans, are leaning into their pragmatism in response to the current political climate — one which has left many skeptical that Capitol Hill can jolt into action on an ambitious proposal like Medicare for All quickly enough to wrangle the soaring costs of health care,” Morning Consult said.
Chart of the Day: The Explosive Growth of the EITC
The Earned Income Tax Credit, a refundable tax credit for low- to moderate-income workers, was established in 1975, with nominal claims of about $1.2 billion ($5.6 billion in 2016 dollars) in its first year. According to the Tax Policy Center, by 2016 “the total was $66.7 billion, almost 12 times larger in real terms.”
Chart of the Day: The Big Picture on Health Care Costs
“The health care services that rack up the highest out-of-pocket costs for patients aren't the same ones that cost the most to the health care system overall,” says Axios’s Caitlin Owens. That may distort our view of how the system works and how best to fix it. For example, Americans spend more out-of-pocket on dental services ($53 billion) than they do on hospital care ($34 billion), but the latter is a much larger part of national health care spending as a whole.
