Week 40 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. The weekly data was worse compared to last week.
Analyst Opinion of the Rail Data
We review this data set to understand the economy. If coal and grain are removed from the analysis, rail has recently been declining around 5% - but this week was -6.5%. Under normal circumstances one should consider this recessionary as trucking tonnages are down also. This also correlates to the contraction in manufacturing and the wholesale sectors - so rail is not an outlier.
It does appear that the downward slide in the one year rolling averages will pause shortly as the rate of increase in the rate of decline is continuing to be smaller. But this movement is like watching snails race. Based on the current trends - rail year-over-year rate of contraction should start improving by year end.
Still I am grappling with what this contraction actually means as the USA economy is not being pulled into a recession.
The contraction in rail counts 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 October 8, 2016.
For this week, total U.S. weekly rail traffic was 521,789 carloads and intermodal units, down 6.1 percent compared with the same week last year.
Total carloads for the week ending October 8 were 264,165 carloads, down 5.9 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 257,624 containers and trailers, down 6.4 percent compared to 2015.
Two of the 10 carload commodity groups posted an increase compared with the same week in 2015. They were grain, up 8.2 percent to 26,845 carloads; and motor vehicles and parts, up 6.2 percent to 18,946 carloads. Commodity groups that posted decreases compared with the same week in 2015 included petroleum and petroleum products, down 29.8 percent to 9,587 carloads; nonmetallic minerals, down 9.5 percent to 35,305 carloads; and coal, down 8.3 percent to 90,195 carloads.
For the first 40 weeks of 2016, U.S. railroads reported cumulative volume of 10,001,381 carloads, down 10.4 percent from the same point last year; and 10,341,236 intermodal units, down 3.3 percent from last year. Total combined U.S. traffic for the first 40 weeks of 2016 was 20,342,617 carloads and intermodal units, a decrease of 6.9 percent compared to last year.
Coal is over 1/3 of the total railcar count, and this week the EIA says coal production is 6.7 % 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 October 1, 2016
Estimated U.S. coal production totaled approximately 16.7 million short tons (mmst)
This production estimate is 6.5% higher than last week's estimate and 6.7% lower than the production estimate in the comparable week in 2015
East of the Mississippi River coal production totaled 6.3 mmst
West of the Mississippi River coal production totaled 10.5 mmst
U.S. year-to-date coal production totaled 540.5 mmst, 21.9% lower than the comparable year-to-date coal production in 2015
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