Latest traffic data from the Association of American Railroads says much about a rebound in tangible economic activity within the U.S. as well as lingering overcapacity in the economy.
The Association of American Railroads said the seven top-tier Class I railroads in the U.S. and Canada, plus some regional lines that also report traffic through the trade group, originated 387,283 new carloads of bulk commodities and equipment for the week ending April 24, up from 384,252 units a week earlier.
Their new intermodal pickups of 264,375 were almost even with the 264,593 they had in the April 17 week. But for just the five U.S.-owned Class Is and a few others, intermodal loadings of 212,347 units in the latest week were the highest so far this year.
In all, the continent’s major railroads loaded 13.9 per cent more containers and trailers last week than for the same week last year, and 16.5 per cent more cargoes in bulk railcars. That put intermodal traffic up 9.9 per cent for the first 16 weeks of 2010, while carloads were up 7.6 per cent.
Those latest gains, and the steady increases that have persisted throughout the spring, are prompting many rail industry officials to say the economy is finally on firm footing. But they point out that traffic remains well below the levels of just two years ago, before the worst of the recession kicked in, and that is keeping lots of rail equipment sidelined.
It’s an example of how economic activity is picking up… but U.S. interest rates can be kept low since there is still a substantial output gap in the U.S. economy, ie. we’re not bumping up against the economy’s full output based on current capacity yet. Yes, this is just rail, but it’s an example of what is going on in many other industries — growth, less overcapacity, but continued overcapacity nonetheless.
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