October 2011 rail traffic has entered a new upward trend with rail traffic growing 1.7% year-over-year. This is a reversal of the previous downward trend which ended in August 2011 with a zero year-over-year growth.
This is a very strong anti-recession data point for the coming months.
The graphic below shows the total traffic on the USA rails showing the new trend. Trend lines are important to understanding the future.
The major reason rail traffic seems sluggish is because of reduced shipments of coal and grains – which are not necessarily economic indicators.
Coal, because the majority of use is in power production in plants which can use alternative fuels, is not an economic indicator. Neither is grains as movements are more of an indication of crop yields and/or export demand. Food staples are not good economic indicators.
Most finished consumer goods which travel on rail move in intermodal units, containers and trailers, on rail cars. If there was only one pulse point to watch – it is this one. And here, it is obvious that the downward trend line was broken in August 2011.
This improvement in intermodal traffic bodes well for the coming months. Rail is the first reporter of October 2011 data. Here is how September 2011 transport indicators compare:
- Diesel Usage: Down 0.2% year-over-year
- Truck Transport: Up 5.9% year-over-year
- Container Counts: Year-over-year imports were down 3.9%, while exports were up 11.8%
- Rail Counts: Up 1.1% year-over-year
All important rail trend lines show economic activity has grown in October. Container loadings on rail were the highest in history. This data is indicating economic expansion.