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News Release


U.S. Department of Transportation Adopts New UAlbany Economic Index

Current figures suggests continuing economic recovery in U.S.

Contact: Michael Parker (518) 437-4980

ALBANY, N.Y. (March 10, 2004) -- Today the U.S. Department of Transportation (DOT) released its first Transportation Services Index (TSI), a new output index developed by University at Albany Economics Professor Kajal Lahiri with assistance from researcher Wenxiong Yao that the government will use to gauge the industry in relation to the economy ("BTS Releases First Monthly Transportation Services Index").

Lahiri's index will be produced monthly by DOT's Bureau of Transportation Statistics (BTS). This number, like industrial production (IP) index, gauges the latest pulse in the transportation sector. The TSI is based on eight constituent series covering air, rail, water, truck, transit and pipeline activities. January's figure shows continuing economy-wide recovery, dating back to the end of the most recent U.S. recession in November, 2001.

As in previous recessions, TSI and its freight component, which is based on trucking tonnage, air freight, rail traffic, waterway tonnage, and movements of petroleum products by pipelines, declined precipitously much ahead of the latest recession that began in March 2001, as determined by the National Bureau of Economic Research (NBER). After the end of the recession, TSI (freight) has steadily increased by over 12 percent by December, 2003. Lahiri's data provides information for each month dating back to 1979.

Currently, the NBER uses IP, Sales, employment (EMP) and Personal Income (INC) as coincident indicators to define business cycles. Since the service providing sectors such as transportation have become increasingly more important in the economy than the manufacturing sectors, and none of the current coincident indicators represent services, the TSI fills in the enormous service-industry gap in monitoring where the bulk of the economy is headed. TSI tends to be more sensitive to economic shocks, and hence is more suitable in detecting cyclical turning points than the current indicators used by NBER.

The transportation industry accounts for 11 percent of the Gross Domestic Product and 11.6 million U.S. jobs. Data suggests the Index will be a leading indicator of trends in the U.S. economy. Lahiri's research has shown that movements in the series foreshadow peaks and troughs of the economy remarkably well. The index will provide insightful information on a critical U.S. industry to market analysts and financial planners, where no comprehensive gauge currently exists.

"Up until now, there has been no easy way to capture countless sources of transportation data into a single, useful number," said U.S. Secretary of Transportation Norman Mineta, in remarks following the opening of the New York Stock Exchange on Jan. 29. "…The index fills that huge void and gives us a solid reading on where the economy is headed."

The U.S. Department of Transportation has hopes that the Index will grow to be as valuable an economic tool as the Gross Domestic Product or the Producer Price Index in helping gauge the U.S. Economy, according to Mr. Mineta.

Kajal Lahiri can be reached for radio, television and print interviews, guest commentary and expert analysis. For more information or queries, please contact the University at Albany Office of Media Relations, (518) 437-4980.

Kajal Lahiri's reports are available in PDF form at:

http://www.albany.edu/~nysurvey/ERI/AEL2004.pdf
http://www.albany.edu/~nysurvey/ERI/TRR2004.pdf


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