Transportation Economic Trends
Transportation as an Economic Indicator:
Transportation Economic Concepts
This page highlights transportation economic concepts related to transportation as an economic indicator.
What is the Transportation Services Index and How is it a Transportation Economic Indicator?
The Bureau of Transportation Statistics’ (BTS’) Transportation Services Index (TSI) measures the volume of freight and passengers moved. BTS produces three indexes: a freight index, a passenger index, and a combined index. The indexes incorporate monthly data from multiple for-hire transportation modes. The TSI includes only domestic "for-hire" transportation operated on behalf of or by a company that provides freight or passenger transport services to external customers for a fee. Not included in for-hire passenger transportation are taxi, paid ride services in personal motor vehicles (e.g., Uber and Lyft), intercity bus services, and noncommercial passenger travel (e.g., trips in the household car). For-hire transportation also does not include transportation services carried out by firms for their own purposes, known as in-house transportation (e.g., goods moved by trucks owned and operated by a firm). The for-hire transportation services covered in the TSI constitutes slightly more than half of all transportation services (excluding noncommercial passenger travel).
Each TSI index shows the month-to-month change in for-hire transportation services. BTS seasonally adjusts the monthly data for each transportation mode and then combines to produce the three indexes. The passenger index is a weighted average of data for passenger aviation, transit, and passenger rail. The freight index is a weighted average of data for trucking, freight rail, waterborne, pipeline, and air freight. The combined index is a weighted average of all these passenger and freight modes. These indexes serve both as multimodal monthly measures of the state of transportation and as indicators of the U.S. economic future.
BTS research shows that changes in the freight TSI occur before changes in the economy, making the freight TSI a useful economic indicator. The TSI commonly is cited along with the Dow Transportation Index and the Cass Freight Index as an economic indicator. All three reflect the responses of transportation providers to the economy’s demands for moving freight and/or passengers. Economic growth reflects increases in the production and demand for goods and services. To produce more goods and deliver them to consumers, industries require additional freight transportation services, both for finished products and for raw material and intermediate goods all along the supply chain. Because the earlier stages of production can be particularly transportation intensive, transportation has been seen as an indicator of economic growth (and decline). The table below describes each of these indexes and shows the differences among them. Further detail can be found in the technical brief What the Transportation Services Index, Dow Transportation Index, and Cass Freight Index Tell Us.
Description of the Bureau
of Transportation Statistics Freight Transportation Services Index and Other Freight Indexes
U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Economic Trends, available at www.bts.gov/product/transportation-economic-trends.
Related Data and Interactive Visualizations
Transportation Services Index and relationship to other economic indicators