Seeking Alpha
Hedge fund manager, long/short equity, value
Profile| Send Message|
( followers)

Total North American rail traffic rose significantly last week to 708k cars. All categories except chemical/petroleum showed increases over the previous week. Auto and forest products were particularly strong (think care sales/housing, and then read this). While the rise is part of a seasonal trend, it remains a strong data point.

Here is the data going back to 2009:

(click to enlarge)
I also include oil shipments here. There has been talk in the past of rail traffic being the reason rail traffic is high, not the overall economy's fundamentals. While chemical/petroleum shipments have increased ~5k/week since 2011, coal traffic has decreased 2x-4x that amount on a weekly basis (due to increased use of natural gas shipped by pipeline). So all that chemical/petroleum increase (note all of the increase is not solely due to oil) has done is helped to offset to larger decline in coal. So, when we see strong rail numbers, yes, it does mean the economy is strengthening.

(click to enlarge)

Source: Rail Traffic Rises