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UPDATE 1-US holiday driving to hit 8-yr high this wkend-AAA

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By Richard Valdmanis

NEW YORK, Aug 26 (Reuters) - The number of U.S. travelers jumping into their cars this Labor Day holiday weekend is expected to be the highest in eight years, as more Americans favor driving over flying, a travel group said on Tuesday.

Some 28.2 million people plan to drive 50 miles or more this weekend, up 2.2 percent from last year to the highest level since 1995, according to a survey by the American Automobile Association (AAA).

The increase in driving comes amid shrinking airline capacity and security delays since the Sept. 11, 2001, attacks and a trend among travelers toward driving on shorter trips.

"Airlines have been cutting back flights, and so there are obviously fewer seats available for travelers," said Justin McNaull, a spokesman for the AAA. "Additional security after September 11 has also led a lot of people to reevaluate the time it takes to take a mid-range flight."

The number of people people planning to travel by plane for the Labor Day holiday is down 2.6 percent from last year at 3.7 million, according to AAA's survey.

Aside from potentially infuriating traffic jams, the high volume of drivers will put pressure on already thin national stockpiles of gasoline, which are dragging along at nine-month lows, according to U.S. government figures.

Gasoline pump prices this week shot up to an all-time high of $1.747 a gallon due to disruptions at refineries following this month's massive blackout and a pipeline outage that forced Arizona residents to line up for fuel.

The supply disruptions have mingled with strong gasoline consumption in the past four weeks of just under 9.4 million barrels per day, up nearly 2 percent from the year-ago figure, according to the U.S. Department of Energy.

While holiday drivers are not expected to see prices fall before the weekend, the Energy Department's analytical arm said pump costs should ease in September as high prices make it profitable for refiners to produce more gasoline and as demand eases with the end of summer vacations.

The Labor Day weekend is the traditional end of high-demand summer driving season.

Increased driving on the Labor Day weekend also raises the potential for traffic jams and accidents.

The most recent data from the U.S. National Highway Traffic Safety Administration showed more than 6.3 million car accidents in 2002, with 42,815 fatalities, up from 37,795 fatalities in 2001.

Traffic accidents are the leading cause of death for people between two and 33 years old, the NHTSA said.