Five Transportation Charts That Explain (Mostly) Everything

NO. 1:

In the March jobs report, the economy appears to be heading in the right direction: Americans are increasingly back to work. The U.S. added 431,000 jobs in March. Hourly wages jumped as well, rising at nearly the fastest pace in 40 years.   

In addition, many industries have recovered their pre-pandemic job levels. Out of the 11 major industries, 6 have regained all the jobs lost in the pandemic recession (transportation, professional services, retail, publishing, finance). Transportation added over half a million new jobs – recovering 110% of jobs lost since the pandemic began. The biggest concern remains leisure and hospitability – which includes restaurants, bars, hotels, and various forms of recreation. This sector still has 1.5 million fewer jobs.       

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NO. 2:

While the March jobs report is positive news, inflation fears loom large and are forcing Americans to rethink financial choices. In a recent CNBC survey, three-quarters of Americans are worried that higher prices will force them to change their buying patterns. According to a Moody’s Analytics report, current inflation rates are costing the average U.S. household an additional $300 per month.           

Consumers are therefore cutting back. The biggest area of cutbacks is dining out. People are also driving less and switching brand name products for generic ones. Likewise, nearly 3 in 10 consumers have canceled a planned vacation and a significant proportion delayed a car purchase.   

These behavioral responses suggest consumers will play a big part in slowing the economy – regardless of what the Federal Reserve may do.   

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NO. 3:

This next graph also dampens expectations from the March jobs report. Recall, that nearly 70% of the U.S. economy turns on consumption. And consumption depends on consumers’ real disposable income – income accounting for the impact of inflation. Rising inflation lowers real income and the chart below from The Daily Shot demonstrates inflation’s considerable effects. Over the past few months, real disposable income dropped below pre-pandemic trends lines.    

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NO. 4:

While the pandemic lockdowns may never again happen in the United States, China remains committed to a zero-Covid policy. This presents a genuine problem for our own economy. Western ports in California have largely solved the bottlenecks and waiting lines that riddled shipping patterns for months. But zero-covid policies – widespread lockdowns – have now backed up major ports in China. The number of ships waiting to load or discharge at Shanghai’s port, for example, is unprecedented. In normal circumstances (black line), there are on average about 100 ships waiting. Now over 300 (red line)! Thus, expect continued delays and supply-chain snags.

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NO. 5:

General Motors and Honda recently announced a partnership to develop a series of low-priced electric vehicles. They aim to produce millions of electric cars in a bid to challenge Tesla sales. The automakers emphasized the new deal is for inexpensive EVs including popular compact cross-over models. GM leaders said models will come in below the $30,000 price tag. 

“We have a very important goal…that by mid-decade, by 2025, we’ll sell more EVs in the U.S. than anyone else and to do that, you need to have a portfolio of vehicles…We definitely can scale and can do it quickly.”

— Mary Barra, GM Chief Executive

GM and Honda’s optimism is symptomatic of the rapid escalation of many auto companies’ investment in EV technologies.   

But there are skeptics.  The McClellan Market Report published the chart below, outlining several key metals involved in EV construction.  How much of the metals are required varies by model but the chart shows estimated costs for an average EV.   Clearly, prices are climbing at alarming rates – for many reasons including the Russia-Ukraine War and the difficulties of mining the metals.  The burgeoning demand for all things EV is also contributing to rising costs.  This suggests, at a minimum, that GM and Honda’s promise of affordable EVs (by 2025) is more about marketing than about reality.     

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