UPDATE 3-US Aug highway travel up 1.6 pct vs year ago

Wed Oct 20, 2010 5:00pm BST

* Rise in highway travel matches rise in gasoline demand

* Driving up most in Washington, D.C., N. Dakota, Nebraska (adds analyst's comments)

By Tom Doggett

WASHINGTON, Oct 20 (Reuters) - U.S. highway travel rose 1.6 percent in August compared with a year ago, the Transportation Department said on Wednesday, as lower fuel prices and an improving economy encouraged more leisure and vacation travel.

Highway travel in August rose 4.3 billion miles to 267.4 billion vehicle miles for the month, according to the government's data.

August was the second biggest increase in monthly highway travel this year after a 2 percent jump in March.

The number of miles driven so far this year is up just 0.4 percent, or 7.3 billion, from the same period in 2009. the department said.

Driving increased in every region of the country during August, with highway travel rising the most in the Midwest and Great Lakes region, up 2.6 percent.

The strong jump in the number of miles driven reflects other government data that show rising motor fuel demand as the economy improves. Pump prices also fell during the second half of the month, encouraging more leisure driving and vacation travel.

The 1.6 percent increase in August highway travel matches the Energy Department's preliminary estimate of a 1.6 percent rise in U.S. gasoline demand for the month.

Phil Flynn, energy analyst at PFGBest in Chicago, said there was some pent-up travel demand due to storms in July. "Many people put off vacations until the skies cleared in August. I think basically people were going stir crazy," he said.

Flynn also pointed out there was an uptick in consumer confidence during August. The Conference Board's Consumer Confidence Index rose to 53.2 in August, up from July's 51.0.

However, the American Petroleum Institute reported a 0.8 percent drop in gasoline demand for August compared to a year earlier.

The Transportation Department said the areas with the biggest increase in August highway travel were: Washington, D.C. (up 8.8 pct), North Dakota (up 6.7 pct), Nebraska (up 5.1 pct) and Indiana (up 4.5 pct).

The only states with a decline in highway travel were: West Virginia (down 1.9 pct), Louisiana (down 1.8 pct), Nevada (down 0.5 pct) and Florida (down 0.4 pct).

The department tracks motorists through more than 4,000 automatic traffic recorders operated by state highway agencies. (Reporting by Tom Doggett; Editing by Alden Bentley and Cynthia Osterman)

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