Rail Movements Continue to Show Strength in October

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.

Rail shipments have seasonal characteristics, and we should see a drop in car counts in November and December.

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.

3 replies on “Rail Movements Continue to Show Strength in October”

Comments are closed.