Rail Week Ending 21 November 2020 - Rolling Averages Worsen

Week 47 of 2020 shows same week total rail traffic (from the same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. Total rail traffic has been mostly in contraction for over one year - and now is slowly recovering from the coronavirus pandemic.

Analyst Opinion of the Rail Data

Total rail traffic has two components - carloads and intermodal (containers or trailers on rail cars). Container exports from China are now recovering, container exports from the U.S. remain deep in contraction. This week again intermodal continued in expansion year-over-year and continues on a strengthening trendline.

Carloads are in contraction year-over-year this week.

But overall because of the strength of intermodal, rail is on an improving trendline.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) contracted 5.6 % year-over-year for this week. We primarily use rolling averages to analyze the intuitive data due to weekly volatility - and the 4 week rolling year-over-year average for the intuitive sectors worsened from -5.5 % to -5.8 %

When rail contracts, it suggests a slowing of the economy.

The following graph compares the four-week moving averages for carload economically intuitive sectors (red line) vs. total movements (blue line):

Intermodal transport growth was weak and in contraction in 2019.

This analysis is looking for clues in the rail data to show the direction of economic activity - and is not necessarily looking for clues of the profitability of the railroads. The weekly data is fairly noisy, and the best way to view it is to look at the rolling averages (carloads [including coal and grain] ).

  Percent current rolling average change from the rolling average of one year ago Trend Direction
4 week rolling average +2.6 % unchanged
13 week rolling average +0.4 % improving
52 week rolling average -8.9 % worsening
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