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Purveyor

(29,876 posts)
Mon Jan 11, 2016, 01:18 PM Jan 2016

Bank of America: Rail Traffic Is Saying Something Worrying About the U.S. Economy

January 11, 2016 — 10:21 AM EST

It's not the jobs report or the latest housing data but railway cargo that has analysts at Bank of America concerned.

Railroad cargo in the U.S. dropped the most in six years in 2015, and things aren't looking good for the new year.

"We believe rail data may be signaling a warning for the broader economy," the recent note from Bank of America says. "Carloads have declined more than 5 percent in each of the past 11 weeks on a year-over-year basis. While one-off volume declines occur occasionally, they are generally followed by a recovery shortly thereafter. The current period of substantial and sustained weakness, including last week’s -10.1 percent decline, has not occurred since 2009."

BofA analysts led by Ken Hoexter look at the past 30 years to see what this type of steep decline usually means for the U.S. economy. What they found wasn't particularly encouraging: All such drops in rail carloads preceded, or were accompanied by, an economic slowdown (Note: They excluded 1996 due to an extremely harsh winter).



"Similar periods of weakness have occurred in only five other instances since 1985: (1) the majority of 1988, (2) the first half of 1991, (3) several weeks in early 1996, (4) late 2000 and early 2001, and (5) late 2008 and the majority of 2009 … all either overlapped with a recession, or preceded a recession by a few quarters."

Of course, many would argue that a shift away from coal-powered energy, a slowdown in the industrial sector, and the petering out of the U.S. shale boom would naturally lead to fewer goods being moved by rail. Hoexter and his team, however, suggest that the slowdown is spreading to more consumer-oriented segments. Intermodal carloads typically related to consumer goods were up 1 percent in the first quarter of 2015 and 3.6 percent in the second quarter but fell 1.7 percent in the final quarter of last year.

more...

http://www.bloomberg.com/news/articles/2016-01-11/bank-of-america-rail-traffic-is-saying-something-worrying-about-the-u-s-economy

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Bank of America: Rail Traffic Is Saying Something Worrying About the U.S. Economy (Original Post) Purveyor Jan 2016 OP
No surprise, elleng Jan 2016 #1
If the nation and rail industry wont invest in rail infrastructure wordpix Jan 2016 #2
This nations infrastructure is crumbling at an alarming rate across the spectrum. Road, bridges, Purveyor Jan 2016 #3
Couldn't the price of fuel make trucking more attractive? nt mattvermont Jan 2016 #4
We are in a Commodity Crash and appears Wellstone ruled Jan 2016 #5

elleng

(130,156 posts)
1. No surprise,
Mon Jan 11, 2016, 01:24 PM
Jan 2016

a reliable leading indicator.

and this: Hoexter and his team, however, suggest that the slowdown is spreading to more consumer-oriented segments. Intermodal carloads typically related to consumer goods were up 1 percent in the first quarter of 2015 and 3.6 percent in the second quarter but fell 1.7 percent in the final quarter of last year.

wordpix

(18,652 posts)
2. If the nation and rail industry wont invest in rail infrastructure
Mon Jan 11, 2016, 01:32 PM
Jan 2016

it will decline further. Not saying coal's drop in consumption has nothing to do with it but how about some rail investment? Let's get with the 21st century instead of the 100 yr old system we now have.

 

Purveyor

(29,876 posts)
3. This nations infrastructure is crumbling at an alarming rate across the spectrum. Road, bridges,
Mon Jan 11, 2016, 01:43 PM
Jan 2016

rail, water systems.

No, unfortunately this country has seen its best days unless we stop with the needless war/crusades and fix the home base first.

 

Wellstone ruled

(34,661 posts)
5. We are in a Commodity Crash and appears
Mon Jan 11, 2016, 02:24 PM
Jan 2016

Corn,Beans,and Wheat are staying in storage and not going onto the open market. Noticed Corn is back to or below emplacement costs,and Beans are just about there. Outside of Oil,Grains are one of the largest Rail demand items. When it comes to Rail infrastructure,the East Coast and the South have the major issues. And that is due to the Operational and ownership of the Regions major carriers. With Ag price supports and allowance for on farm storage,think the next data point will be in March. That is when the Producers need to start making room this years crops and it is settlement time for Hedging Contracts and it is Tax time .

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