Rail Week Ending May 15 - Growth Surge Continues

Week 19 of 2021 shows the 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 - which has been in contraction for over one year - is now surging as it is being compared to the pandemic lockdown period one year ago.

Analyst Opinion of the Rail Data

We are now seeing great rail growth as the data is being compared to the coronavirus lockdown period last year.

Total rail traffic has two components - carloads and intermodal (containers or trailers on rail cars). This week again both carloads and intermodal continued in expansion year-over-year - continuing on a strengthening trendline.

Rail is now growing year-over-year.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) expanded 35.3 % 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 was unchanged at +34.4 %

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):

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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 +28.8 % unchanged
13 week rolling average +16.4 % improving
52 week rolling average +1.5% improving

A summary for this week from the AAR:

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Disclaimer: No content is to be construed as investment advise and all content is provided for informational purposes only.The reader is solely responsible for determining whether any investment, ...

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