Rail Week Ending Saturday, Feb. 2: Another Bad Week

Week 5 of 2019 shows same week total rail traffic (from same week one year ago) declined according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages remain insignificantly positive.

Analyst Opinion of the Rail Data

Last week I assume the poor data this week was caused by a mismatch in holidays from the previous year. But now we have a second bad week. I hate to think this is a precursor to further economic softness.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain and petroleum) contracted 6.0 % 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 declined from +3.9 % to +0.3 %.

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

.Intermodal transport (containers or trailers on rail cars) growth has been relatively strong over the 12 months.

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 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] and intermodal combined).

  Percent current rolling average is larger than the rolling average of one year ago Current quantities accelerating or decelerating Current rolling average accelerating or decelerating compared to the rolling average one year ago
4 week rolling average +0.3 % accelerating decelerating
13 week rolling average +1.1 % decelerating decelerating
52 week rolling average +2.5 % decelerating decelerating

A summary for this week from the AAR:

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