Rail Week Ending Saturday, Jan. 5: Very Strong Performance In First Week Of The New Year

Week 1 of 2019 shows same week total rail traffic (from same week one year ago) improved according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages strongly improved.

Analyst Opinion of the Rail Data

Surprise - rail is now saying the economy is improving.

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) expanded 8.4 % year-over-year. 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 improved from +0.2% to +2.4 %.

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 past year - and has been improving over the last several weeks.

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 +3.4 % decelerating accelerating
13 week rolling average +1.5 % accelerating accelerating
52 week rolling average +2.4 % accelerating accelerating

A summary for this week from the AAR:

For this week, total U.S. weekly rail traffic was 436,103 carloads and intermodal units, up 4.8 percent compared with the same week last year.

Total carloads for the week ending January 5 were 221,759 carloads, up 6.2 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 214,344 containers and trailers, up 3.4 percent compared to 2018.

Eight of the 10 carload commodity groups posted an increase compared with the same week in 2018. They included nonmetallic minerals, up 3,791 carloads, to 25,665; metallic ores and metals, up 2,619 carloads, to 21,738; and petroleum and petroleum products, up 2,413 carloads, to 12,057. Commodity groups that posted decreases compared with the same week in 2018 were motor vehicles and parts, down 1,261 carloads, to 9,213; and miscellaneous carloads, down 294 carloads, to 7,251.

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