Abstract:
Transportation plays a central role in facilitating economic activities across sectors and between regions and is essential to business-cycle research. With four coincident indicators that represent different aspects of the transportation sector--an index of transportation output, payroll, personal consumption, and employment--the classical business-cycle and growth-cycle chronologies are defined for this sector. It is found that, relative to the economy, business cycles in the transportation sector have an average lead of nearly 6 months at peaks and an average lag of 2 months at troughs. Similar to its business cycles, growth slowdowns in the transportation sector also last longer than the economywide slowdowns by a few months. This study underscores the importance of transportation indicators in monitoring cyclical movements in the aggregate economy.
Supplemental Notes:
This paper appears in Transportation Research Record No. 1864, Transportation Finance, Economics, and Economic Development 2004.
