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).

A summary for this week from the AAR:

U.S. railroads originated 1,238,487 carloads in January 2019, up 1.7 percent, or 21,054 carloads, from January 2018. U.S. railroads also originated 1,316,168 containers and trailers in January 2019, up 0.5 percent, or 6,008 units, from the same month last year. Combined U.S. carload and intermodal originations in January 2019 were 2,554,655, up 1.1 percent, or 27,062 carloads and intermodal units from January 2018.

In January 2019, 11 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with January 2018. These included: petroleum & petroleum products, up 12,791 carloads or 23.9 percent; chemicals, up 3,841 carloads or 2.5 percent; and primary metal products, up 3,103 carloads or 7.2 percent. Commodities that saw declines in January 2019 from January 2018 included: crushed stone, sand & gravel, down 2,118 carloads or 2.2 percent; coke, down 2,046 carloads or 9.9 percent; and motor vehicles & parts, down 2,015 carloads or 2.7 percent.

"January rail traffic painted a mixed picture, with healthy gains for some key commodities, while others continued to be a drag on overall carload numbers," said AAR Senior Vice President of Policy and Economics John T. Gray. "Intermodal volumes, chemicals and petroleum and petroleum products all continued their momentum from 2018. On the other hand, motor vehicles and parts were down in January — and overall carloads were held back by declines in coal and grain, but these fluctuations don't reflect weakness in the economy."

Excluding coal, carloads were up 21,864 carloads, or 2.7 percent, in January 2019 from January 2018. Excluding coal and grain, carloads were up 22,984 carloads, or 3.3 percent.

Total U.S. carload traffic for the first month of 2019 was 1,238,487 carloads, up 1.7 percent, or 21,054 carloads, from the same period last year; and 1,316,168 intermodal units, up 0.5 percent, or 6,008 containers and trailers, from last year.

Total combined U.S. traffic for the first five weeks of 2019 was 2,554,655 carloads and intermodal units, an increase of 1.1 percent compared to last year.

Week Ending February 2, 2019

Total U.S. weekly rail traffic was 498,288 carloads and intermodal units, down 9.1 percent compared with the same week last year.

Total carloads for the week ending February 2 were 242,718 carloads, down 8.4 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 255,570 containers and trailers, down 9.6 percent compared to 2018.

Two of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were petroleum and petroleum products, up 2,186 carloads, to 12,979; and miscellaneous carloads, up 1,243 carloads, to 11,066. Commodity groups that posted decreases compared with the same week in 2018 included coal, down 13,963 carloads, to 75,752; grain, down 3,189 carloads, to 21,508; and nonmetallic minerals, down 3,044 carloads, to 29,630.

The middle row in the table below removes coal, grain and petroleum from the changes in the railcar counts as these commodities are not economically intuitive.

[click on graph below to enlarge]