Rail Traffic Continues to Point to Economic Growth

The beginning of the year is notoriously volatile in rail data, but a trend is developing and it’s a positive one. This week’s rail data points to another solid week of data with 7.2% gains in year over year intermodal traffic. This brings the 3 month moving average to 4.12%.

AAR has more details:

“AAR today also reported mixed rail traffic for the week ending Feb.2, 2013.  Last week U.S. railroads originated 274,700 carloads, down 3.4 percent compared with the same week last year, while intermodal volume for the week totaled 249,231 trailers and containers, up 7.2 percent compared with the same week last year.

Eight of the 20 carload commodity groups posted increases compared with the same week in 2012, with petroleum products, up 52.3 percent; lumber and wood products, up 26.5 percent, and farm products excluding grain, up 18.7 percent. The groups showing a decrease in weekly traffic included metallic ores, down 22.4 percent; grain, down 15.7 percent, and nonmetallic minerals, down 12.1 percent.

Weekly carload volume on Eastern railroads was down 4.7 percent compared with the same week last year. In the West, weekly carload volume was down 2.6 percent compared with the same week in 2012.

For the first five weeks of 2013, U.S. railroads reported cumulative volume of 1,339,604 carloads, down 6.3 percent from the same point last year, and 1,168,630 trailers and containers, up 5.3 percent from last year.”

Chart via Orcam Investment Research:

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. Why do you use intermodal traffic as a trump over carloads? Carloads are -6.3% cumulative ytd (y/y) vs. +5.3% intermodal, and carloads account for more volume than intermodal (~15% more).

    Intermodal growth has been consistantly strong over the past couple years, but carloads have been equally weak. (I think it’s a coal decline/oil rise story.) Not to put much emphasis on the weekly datapoint–as opposed to the trend–but in aggregate this week’s report was a modest improvement upon last week, yet the year is off to a weak start… even if you incorporate the calendar effect from New Years.

  2. Romeo

    1)The 6-month(cumulative total)ROC for carloads is negative
    2)You must subtract coal and grain from the weekly data to get an economic indicator.
    3)I discount Intermodal data because these goods may have been counted in the carload data

    This is not a trading technique–but when you keep this data over many yrs you get a feel for the economy

    I would be cautious of
    “Rail Traffic Continues to Point to Economic Growth”

  3. I notice from your articles on rail traffic that it’s quite volatile and all over the map. Doesn’t seem to be any predictive value.

  4. Hi Tom–
    I’ll get around to it. I had some YE/quarterly meetings around the time of tat convo, but I’d really like to continue it. In have to be jones about 2 things: First, I’d like to hear from Cullen about a few points I raised, because we’re meandering onto other topics; second, it’s really hard to piece back together our discussion, since “Ask Cullen” was broken (and fragmented our thread). I know Cullen was away that week though.

    Once I have a night this week to revisit, I want to keep the ball rolling. Thanks!

  5. Especially when the comment is from anyone in the financial services industry tied to the current bubble/debt/Marxist paradigm!