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U.S. car production: right on track

Passenger car production mirrors the pattern of railroad construction, 20 years delayed

The U.S. has always been preoccupied with travel. Lewis and Clark’s 1804-06 expedition revealed that no single waterway spanned the continent, which led Thomas Jefferson to push for a railroad network to connect the east and west coasts. Over the next 80 years, the U.S. experienced its railroad boom. The next 20 years brought about an automobile boom…and the first coast-to-coast journey by car. This post won’t cover travel by canoe, but it will look at railroads and cars.

The graph depicts miles of railroads and the number of passenger cars built throughout America’s early industrial history. The timing differs—the first U.S. railroad was chartered in 1815, and the first U.S. gas-powered auto was invented in 1893—but the patterns of growth for these two industries are strikingly similar. Both modes of transportation experienced an initial spike (railroads in the mid-1850s and cars in the 1890s), followed by a slight decline and then a higher peak (railroads in 1887 and cars in 1907).

The obvious difference is that 20-year delay in passenger car peak production, due to the pace of technological change in the U.S. Labor patterns and manufacturing itself changed during the early 20th century with the introduction of the assembly line and shifting consumer tastes, which led automobile production to rise. Conversely, railroad construction slowed as fewer locations in the U.S. were left unconnected.

Economic conditions over the years have also affected these two variables in major ways: Railroad construction, which made up 15% of U.S. capital formation in the 1880s, declined precipitously during the Depression of 1882-85. Likewise, car production plummeted after the Panic of 1907. The Great Depression also had far-reaching effects on both railroad construction and passenger car production: In 1933, both variables saw a decline of about 85% from the prior year, showing the susceptibility of the construction and manufacturing sectors to economic downturns.

How this graph was created: Search FRED for “miles of railroad built” and select the relevant series. Click “Edit Graph” and select “Add Line.” Search “passenger cars built” and click “Add.” Under the “Format” tab, change the y-axis position of “Passenger Cars Built for the United States” to “Right.” Adjust the end date to 1934.

Suggested by Maria Hyrc.

View on FRED, series used in this post: A01154USA471NNBR, A02F2AUSA374NNBR

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