Total N. American rail traffic last week came in at 672K vs 670K the prior week….call it a wash. What is VERY encouraging is that rail traffic seems to be defying the Japan disaster. We are now left wondering not whether Japan will cause a dip in rail traffic but how much higher could it be without the Japan effect. We are certain that there has been an effect on rail traffic in N. America due to Japan just because of the import/export disruptions on west coast ports. But now it appears rather than causing traffic to fall, it is instead slowing down the growth of it.
This is a VERY big difference as it now means the US economy continues to move forward and expand. I think this also should be cause for some pause to those who think Q1 GDP will come in below the current revised downward expectations (they seem to cluster around 1.8% -1.9%). We will have to look at the import/export effect of it but I am now thinking we will do better than the current expectations…perhaps substantially better.