Week 1 of 2020 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The intuitive sectors this week improved but remain in contraction.

Analyst Opinion of the Rail Data

We review this data set to understand the economy. The intuitive sectors (total carloads removing coal, grain, and petroleum) declined 4.4 % 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 improved from -5.2 % to -5.4 %.

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):

.Intermodal transport (containers or trailers on rail cars) growth was relatively strong until the beginning of 2019 - and now the year-to-date growth is deep in contraction.

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] and intermodal combined).

A summary for this week from the AAR:

For this week, total U.S. weekly rail traffic was 414,014 carloads and intermodal units, down 5.1 percent compared with the same week last year.

Total carloads for the week ending January 4 were 215,564 carloads, down 2.8 percent compared with the same week in 2019, while U.S. weekly intermodal volume was 198,450 containers and trailers, down 7.4 percent compared to 2019.

Three of the 10 carload commodity groups posted an increase compared with the same week in 2019. They were chemicals, up 1,093 carloads, to 31,006; petroleum and petroleum products, up 997 carloads, to 13,063; and miscellaneous carloads, up 282 carloads, to 7,543. Commodity groups that posted decreases compared with the same week in 2019 included nonmetallic minerals, down 2,836 carloads, to 22,803; motor vehicles and parts, down 2,210 carloads, to 7,004; and coal, down 1,103 carloads, to 69,757.

For the first week of 2020, U.S. railroads reported cumulative volume of 215,564 carloads, down 2.8 percent from the same point last year; and 198,450 intermodal units, down 7.4 percent from last year. Total combined U.S. traffic for the first week of 2020 was 414,014 carloads and intermodal units, a decrease of 5.1 percent compared to last year.

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 the graph below to enlarge]