This week’s rail data conflicts with some recent reports from some major transport firms like Norfolk Southern and FedEx who both said end demand was softening. AAR reported a decline in carloads at -2.9%, but an increase in intermodal at 3.9%. We tend to favor intermodal as it has a better track record of forecasting expansion/contraction in the economy. The updated 10 week moving average dropped slightly to 4.8%, but remains near its highest levels of the year. The AAR has more details:
“The Association of American Railroads (AAR) today reported mixed weekly rail traffic for the week ending September 15, 2012, with U.S. railroads originating 291,530 carloads, down 2.9 percent compared with the same week last year. Intermodal volume for the week totaled 251,720 trailers and containers, up 3.9 percent compared with the same week last year.
Nine of the 20 carload commodity groups posted increases compared with the same week in 2011, with petroleum products, up 46.3 percent; crushed stone, sand and gravel, up 10.8, and food and kindred products, up 10.3 percent. The groups showing a decrease in weekly traffic included farm products excluding grain, down 22.7 percent; metallic ores, down 21.3 percent, and waste and nonferrous scrap, down 19.5 percent.
Weekly carload volume on Eastern railroads was down 5.3 percent compared with the same week last year. In the West, weekly carload volume was down 1.4 percent compared with the same week in 2011.
For the first 37 weeks of 2012, U.S. railroads reported cumulative volume of 10,454,518 carloads, down 2.4 percent from the same point last year, and 8,693,030 trailers and containers, up 3.7 percent from last year.”