United States Department of Transportation
i
Transportation Services Index and the Economy--Revisited
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2014-11-01
[PDF-1.14 MB]
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Alternative Title:Technical Report: Transportation Services Index and the Economy-Revisited
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Edition:Technical Report
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Abstract:In 2007 the Bureau of Transportation Statistics (BTS), the statistical agency of the U.S. Department of Transportation, published a report entitled: Transportation Services Index and the Economy, on the relationship of the freight portion of the Transportation Services Index (TSI) to the growth cycles in the U.S. economy. Since that time, BTS has reengineered the TSI to improve processing of the monthly data and to improve the methodology and data sources used in the calculation of the index. This report provides details on the updated methodology and data, along with the resultant changes in the turning points of the TSI due to these improvements. The TSI is the broadest monthly measure of U.S. domestic transportation services and, as such, provides the best snapshot available of the current state of these services. As an index, the TSI reflects real monthly changes in freight and passenger services in the United States. The TSI consists of three component indexes: a freight index, a passenger index, and a combined (or total) index. Figure 1 shows the freight and passenger indexes as recently displayed on the BTS website. After development of the TSI, it became clear that the index moved in conjunction with other indicators of the national economy. Cycles of various kinds, depths, and durations occur frequently in the U.S. economy. Of these, the business cycles of recession and expansion and the growth cycles are of particular interest to economists. The TSI, as presently published on the BTS website, spans the time period from 2000 to the present and covers two recessions. Extending the TSI back to 1979 allows coverage of five recessions and numerous growth cycles. By comparing the turning points in the extended TSI with other economic data series, it is possible to ascertain whether and how transportation services relate to movement in the overall economy. The freight component of the TSI, which encompasses five modes of transportation, shows a strong leading relationship to the economy. When the accelerations and decelerations of the freight TSI (the turning points in the detrended series) are compared to the growth cycles of the economy, the freight measure leads by an average of approximately 4 months. The passenger TSI exhibits fewer turning points, which were then identified as leading the business cycles of recession and expansion, also by approximately 4 months.
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