Week 34 of 2016 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. This week, all rolling averages' contraction worsened.
Analyst Opinion of the Rail Data
We review this data set to understand the economy - and one element continues to stand out. If I remove coal and grain from the analysis, rail is declining a steady 5% year-over-year for the last 14 weeks. I do not understand what is going on because this piece of data says goods consumption is down 5% - and it is not being confirmed by any data coming from the Federal Reserve, US Census or BEA. This piece of data says the USA is in a recession - but the monetary measures say the economy remains in expansion.
The contraction began over one year ago, and now rail movements are being compared against weaker 2015 data - and this is the cause periodic acceleration in the short term rolling averages. Still, rail is weak to very week compared to previous years.
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 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
13 week rolling average
52 week rolling average
A summary of the data from the AAR:
The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending August 27, 2016.
For this week, total U.S. weekly rail traffic was 539,657 carloads and intermodal units, down 6.2 percent compared with the same week last year.
Total carloads for the week ending August 27 were 269,645 carloads, down 7.3 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 270,012 containers and trailers, down 5.1 percent compared to 2015.
Four of the 10 carload commodity groups posted an increase compared with the same week in 2015. They included grain, up 18.8 percent to 21,727 carloads; motor vehicles and parts, up 6 percent to 19,392 carloads; and farm products excl. grain, and food, up 2.1 percent to 16,465 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 27.5 percent to 10,076 carloads; coal, down 15.9 percent to 91,469 carloads; and metallic ores and metals, down 7.9 percent to 21,493 carloads.
For the first 34 weeks of 2016, U.S. railroads reported cumulative volume of 8,395,455 carloads, down 11.3 percent from the same point last year; and 8,776,969 intermodal units, down 3 percent from last year. Total combined U.S. traffic for the first 34 weeks of 2016 was 17,172,424 carloads and intermodal units, a decrease of 7.2 percent compared to last year.
Coal is over 1/3 of the total railcar count, and this week is 14.7% lower than the production estimate in the comparable week in 2015. The middle row in the table below removes coal and grain from the changes in the railcar counts as neither of these commodities is economically intuitive.
This week Year-over-Year
Ignoring coal and grain
Year Cumulative to Date
[click on graph below to enlarge]
Current Rail Chart:
For the week ended August 27, 2016
Estimated U.S. coal production totaled approximately 16.3 million short tons (mmst)
This production estimate is 2% higher than last week's estimate and 14.7% lower than the production estimate in the comparable week in 2015
East of the Mississippi River coal production totaled 5.9 mmst
West of the Mississippi River coal production totaled 10.4 mmst
U.S. year-to-date coal production totaled 453.9 mmst, 24.5% lower than the comparable year-to-date coal production in 2015
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