Investopedia: Rail Traffic Confirms A Slowing Economy

With a sour stock market since May, it seems like investors have already placed their bets on a slower economy. Now it increasingly looks like the data is validating that position. Payroll figures from Automatic Data Processing (NYSE:ADP) are pointing to an iffy job market, banks like Wells Fargo (NYSE:WFC) aren't upping their loans (and are struggling to get rid of bank-owned houses), metrics like the PMI have weakened, and now rail traffic has slowed. 


The May edition of Rail Time Indicators from the Association of American Railroads shows that carload traffic in the U.S. grew just 0.5% on a year-over-year basis and was flat with April's traffic level. Intermodal is still quite strong (up 7.5% annually and almost 1% sequentially) and came very close to setting a new record.

 Depth and Breadth a Concern
During the fat months of the traffic rebound, it was common to see every (or nearly every) rail category growing. Now that has thinned down to a point where fewer than half of the categories are growing. So while it is true that carloads ex-coal were up over 2% and ex-coal and grain were up 0.4%, the strength of the recovery has tapered off significantly. 



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