Vehicle miles traveled rise as consumer confidence stays weak

The latest reading on vehicle miles traveled was up 4.62% in May and follows a 35.22% jump in April from the prior comparison period, extending a rebound from the 2020 pandemic collapse. At the same time, the personal savings rate sits at 3.0%, near the lower end of its long-run range, suggesting households have less cushion even as they keep moving.

The tension is important for investors: consumers are traveling more, but they are not feeling better. Adalytica’s consumer confidence recession sentiment remains in “Extreme Fear” at 15, while retail goods spending sentiment has fallen to 4, also “Extreme Fear,” indicating that the transportation recovery is not being matched by broad optimism about spending.

That split shows up in ride-hailing stocks. Uber is down to $71.08 from $78.82 on Aug. 28, while Lyft has dropped to $14.90 from $16.72 on Sept. 4, suggesting investors are still pricing in pressure on demand and pricing power despite the pickup in road usage. Both shares remain below their 200-day moving averages, underscoring the market’s caution.

Higher traffic can also ripple through the broader economy as a modest inflationary tailwind through fuel, maintenance and insurance costs. With the 10-year Treasury yield near 4.79%, investors are still balancing evidence of resilient activity against the risk that firmer mobility keeps parts of the consumer basket sticky.

The next test is whether the improvement in road use feeds through to spending and earnings at mobility, auto, energy and travel-related companies, or whether it stalls as weak sentiment and high borrowing costs keep households on a tight leash.