Americans drove 12.2 billion miles less in June than they did a year ago, according to the Federal Highway Administration.The number is too big to fathom. It is probably like driving to the Moon and back 876 times, or some other absurd analogy.
What is certain is that the trend puts a downward pressure on gas prices and could be a factor in per gallon costs going back toward $3. For any company in a business that relies on drivers, though, the driving less trend is bad news.
Hotel and motel company stocks are likely to get hit fairly hard because drivers are staying off the road. It probably does not help fast food places like McDonald's (NYSE: MCD) either. Retailers, including Wal-Mart (NYSE: WMT), are certain to be hurt, but online shopping at retail websites may soften that blow.
Of course, car companies get hammered. People who don't drive don't need new cars. Operators of oil change outlets will probably have a bad year. The same holds true for tire companies.
Put another way, the economy might be better served if drivers would get back in their cars.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
8-14-2008 @ 1:27PM
gumbo koontz said...
many companies already get hammered so why let those companies you mention above off the hook? you are just playing favoritism!! the real issue is we use 25% of energy in the world .. this is insane!!! this cant continue! you hear me, fool?
8-18-2008 @ 12:52PM
whtm said...
GEE DOUG I SEE YOU NEVER TALK ABOUT THE FINANICALS ? WHY TOO MUCH MONEY GONE DOWN THE DRAIN BY WALL STREET? OR JUST NO GUTS OR BRAINS ?