Record Public Transportation Use
In another possible threat to car sales, use of public transportation has reached a multiyear high. According to the American Public Transportation Association:
The demand for public transportation rose last year as Americans took 10.5 billion trips, the second highest ridership since 1957.
APTA President and CEO Michael Melaniphy said, “Every mode of public transportation showed an increase in ridership. Public transit ridership grew in all areas of the country — north, south, east, and west — in small, medium and large communities, with at least 16 public transit systems reporting record ridership.”
China’s Mixed Economic Data
Data about China’s economic recovery continue to swing back and forth. Recent information on manufacturing has been good, as have reports about exports. But, more recently, consumer spending and industrial output have been weak. To some extent the tension between PMI and industrial output makes difficult any interpretation of how that part of China is doing. According to Bloomberg:
China’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed, toughening challenges for a new leadership that wants to narrow the gap between rich and poor.
Production increased 9.9 percent in the first two months and retail sales rose 12.3 percent, government data showed March 9, trailing economists’ estimates. New local-currency loans in February fell to 620 billion yuan ($99.6 billion), the People’s Bank of China said yesterday, lower than the estimates of 27 out of 28 analysts in a Bloomberg News survey.
Slumping Oil Demand
After a relentless two-month rise, gasoline prices have come down very modestly. The AAA Fuel Gauge report shows that the average price nationwide for a gallon of regular was $3.696 yesterday, down from $3.746 a week ago. The price is still above $3.90 in several states, including Alaska, California, Connecticut, Hawaii and New York. Part of the reason for the drop is an erosion in the price of oil. West Texas Intermediate crude traded for nearly $100 in early February. The price is closer to $91 now. The Wall Street Journal reports:
The labor market is adding jobs at a brisk clip and stock markets are setting records. But the oil market has been left out of the party.
Benchmark crude in the U.S. is down 6.1% from a 2013 settlement high of $97.94 in late January, while Europe’s Brent crude is off 6.8% from its high of $118.90 for the year. During the same period, the Dow Jones Industrial Average is up more than 3%, signaling a recent breakdown in the on-again-off-again relationship between the two markets.
A combination of tepid global oil demand and steadily improving supply has taken the steam out of high oil prices and overshadowed otherwise bullish forces like the improving U.S. jobs market, traders and analysts said. A stable supply cushion has also blunted the impact of possible political turmoil in Venezuela following the death of President Hugo Chávez.
Douglas A. McIntyre