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Relationship between driving and GDP during the pandemic

by Michael Sivak, Sivak Applied Research.

As shown in my ongoing monitoring of monthly changes in key transportation indexes, the amount of driving (adjusted for population) during the pandemic decreased substantially. This brief post examines the relationship between driving and GDP during the pandemic.

The raw data for the analysis were the total distance driven by quarter and the corresponding not-seasonally-adjusted real GDP. The sources of the raw data were the Federal Highway Administration and the Federal Reserve Bank of St. Louis, respectively. Neither measure was adjusted for population. The changes in both measures, compared with the corresponding quarter in 2019, are shown in the table below.

Quarter Change in the amount of driving relative to the same quarter in 2019 Change in GDP relative to the same quarter in 2019
January - March, 2020 -5.6% +0.6%
April - June, 2020 -26.0% -9.0%
July - September, 2020 -10.4% -2.6%
October - December, 2020 -9.8% -1.9%
January - March, 2021 -2.1% +0.9%

The main finding of this analysis is that driving during the pandemic decreased sooner and more than did GDP. Specifically:

  • During the first quarter of 2020, driving decreased by 5.6% compared with the first quarter of 2019, while GDP was up by 0.6%.

  • The maximum decreases for both measures were reached during the second quarter of 2020, with driving down 26.0%, but GDP down only 9.0%.

  • By the first quarter of 2021, driving was still down (-2.1%), while GDP has already fully recovered (+0.9%).

Michael Sivak is the managing director of Sivak Applied Research and the former director of Sustainable Worldwide Transportation at the University of Michigan.


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