The October 2010 rail indicator report from the Association of American Railroads (AAR) shows the economy continues to be stable with a slight upward bias. Monitoring of the transport of materials (an economic pulse point) indicates the relative strength or weakness of your economy.
In the chart below from the report, I have circled the portions of the data which have a higher correlation to overall economic activity.
Overall, the overall strength of rail shipments continue to confirm an economy in a depression, and not really growing to any great degree since the economic growth spurt earlier this year. Rail traffic historically rises between September and October – and 2010 was no exception.
This is a “recovery” from a severe recession not unlike the “growth” period between 1933 and 1936. Of course, in the earlier period, there was a much larger increase in GDP.
There is no indication in this data of a double dip. A decline in November and December is to be expected based on seasonality and, unless it goes back near the 2008 and 2009 lows, would not be predicting a return to recession. Econintersect remains vigilant to any signs of a weakening economy.