The Oil Drum

Alan,
You are 100% that one month's figures mean nothing. However, as I look at the 12 month moving average graph, it seems to me that number of miles travelled during the most recent 12 months for which data is available has indeed levelled off, most likely in response to higher gasoline prices.

Although demand for gasoline is highly price inelastic in the short run, it has a much greater eleasticity over time. Nobody can know exactly what the long-run price elasticity of demand for gasoline in the U.S. is, but in all probability it increases not only over time but also at higher levels of price. Thus gasoline may be highly price inelastic over a price range of, say $1.50 to $3.00 per gallon, be somewhat more elastic from $3 to $5 per gallon, and possibly about unitary elasticity (over a period of several years) at a price of $5 to $10 per gallon.

In any case, the law of demand applies: Other things staying the same, a lower quantity will be demanded (purchased) at a higher price than at a lower price. In other words, the demand curve for gasoline is not a vertical line.

The issue of income elasticity of demand is a "whole 'nother beast" and there is no need to go there, except to observe in passing that as nominal national income increases, the demand (i.e. the whole demand curve) for gasoline increases.