1. 1 Bureau of Transportation Statistics The Transportation Services Index: Its Methodology and Relationship to the Recent Recession Ken Notis and Peg Young

2. 2  What is the Transportation Services Index (TSI)? □ A monthly measure of the volume of services performed by the ‘for-hire’ transportation sector □ Covers the activities of for-hire freight carriers, for-hire passenger carriers, and both types of carriers combined Introduction

3. 3 Transportation Services Index, Jan-90 to Jul-10 TSI data and methodology are available for download at www.bts.gov.www.bts.gov

4. 4  TSI Predecessor  Research by Lahiri, Stekler and Yao □ TSOI covered the span of 1979 to 2002 □ Turning point analysis suggested the freight component of the TSOI leads the economy Transportation Services Output Index (TSOI)

5. 5  BTS modifications to the TSOI □ some different data sources □ methods of weighting □ estimating recent values  Published TSI spans from 1990 to the present □ Presently provided on the BTS website  Historical TSI spans from 1979 to the present □ Preliminary results shown in this presentation Historical TSI

6. 6 Data Collection Seasonal Adjustment Index 2000 Weight & Combine Weight & Combine Chain Rail Carloads & Intermodals Truck Tonnage Rail RPM Transit Ridership Air RPM Waterborne Commerce Air Ton-Miles Movement of Gas & Petroleum Passenger TSI Freight TSI Chained Passenger TSI Chained TSI Chained Freight TSI TSI Production Process

7. 7 TSI-Total, Freight, and Passenger

8. 8  Recessions □ Use National Bureau of Economic Research approach (Bry and Boshan, 1971) ▪Moving averages ▪Spencer curves  Growth cycles □ Detrend the data □ Zarnowitz and Ozyildirim (2001) Measurement of Turning Points

9. 9 Freight TSI Smoothed

10. 10 TSI Compared to Recessions

11. 11 TSI Compared to Economic Growth Cycles

12. 12  TSI freight leads the business cycle/growth cycle at peak turning points, is coincident at troughs  The extent of that lead varies considerably  The use of various standard time series techniques, such as deseasonalizing and smoothing, helps to clarify this relationship Initial Conclusions

13. 13 Freight TSI Actual and Smooth Jan-00 to Jul-10

14. 14  TSI freight’s peak was in May 2006, 19 months before the recession began  TSI freight’s trough coincided with the end of the recession  TSI freight does not currently indicate a double dip  Why did TSI lead the recent recession by so much more than it had earlier recessions and slowdowns? □ A different kind of recession? □ Energy cost issues? TSI and the Recession

15. 15 Freight TSI and Gasoline, July-79 to July-10