AAR's new monthly report to detail economic trends based on rail traffic data

The Association of American Railroads yesterday announced it’s launching a monthly publication that will provide insights into what rail traffic data says about U.S. economic trends.

Each week, the AAR Policy and Economics Department collects data detailing carloadings and intermodal volumes across North America. Leading economists, including those at the Federal Reserve, rely on the data to gauge economic health, AAR officials said in a press release.

The AAR’s new Rail Industry Overview (RIO) will include the freight rail index (FRI), which tracks movements across the most economically sensitive rail traffic commodities. The FRI includes intermodal and carloads but excludes coal and grain, whose volumes are driven by factors such as weather or transitions in energy markets that are less directly linked to macroeconomic activity.

“Rail traffic data is among the richest, most timely economic data in the U.S.,” said AAR Chief Economist Rand Ghayad. “Whether it is housing, energy markets or consumer spending, rail traffic touches them all. At a time when various indicators suggest very different paths ahead for the economy, rail traffic data is a common thread that can help connect the dots.”

Historical data shows that freight activity, measured by the FRI and gross domestic product tend to rise and fall in tandem, making the FRI a useful barometer for the economy, AAR officials said.

Leveraging the Policy and Economics Department’s analysis, the new monthly publication will highlight key developments in rail traffic and their implications for the larger economy.

“Amid prevailing uncertainty, June rail data gives reason for cautious optimism about the road ahead,” added Ghayad. “Continued strength in intermodal traffic and modest growth across key carloads suggest that consumer spending remains robust for now and the prolonged manufacturing slowdown may be coming to an end.”