Turn on the television news of late or scan the front pages of a newspaper and you may come away with the impression that the U.S. economy is either stuck in the mud or sliding downhill toward a cliff.
But one early indicator of economic activity, freight carried by U.S. railroads, offers signs that business is picking up overall and particularly in some key industries.
Fort Worth-based BNSF Railway's total freight shipments are up 8.6 percent so far in the third quarter compared with a year ago and up 6.7 percent for the year, according to the railroad's latest report, for the week that ended Sept. 11.
Nationwide, total rail car loads of freight were up 5.7 percent in August from 2009 levels and were at their highest level since 2008. The last week of August saw the highest level of shipments of any month this year.
"Clearly things are much better now than they were last year at this time," said John Lanigan, executive vice president and chief marketing officer of BNSF.
Rail volumes went up and down in the year's first half, much like the economy as a whole, Lanigan said. But over "the last eight to 10 weeks, things have increased pretty steadily."
That's also the view of D'Ann Petersen, an economist with the Federal Reserve Bank of Dallas. "The economy is improving," said Petersen, who writes the bank's regular Beige Book report on regional economic conditions. "We're not declining anymore."
Is this a turnaround that lasts, or merely a bounce? That's the trillion-dollar question that Lanigan says even the railroad has no way of answering. "We want to remain optimistic there will be a good Christmas selling season," he said. "But beyond the Christmas season it's really hard to look ahead."
The Texas economy, as the Fed and others have noted, has weathered the Great Recession somewhat better than the country as a whole, with a lower unemployment rate, modest job growth and significant activity in areas like oil and gas exploration and production.
The railroad information isn't an all-seeing crystal ball on the economy, but it encompasses a wide geography and broad swaths of the economy. BNSF, the nation's second-largest railroad, has 32,000 miles of track in 28 states and serves 40 ports. The entire U.S. is crisscrossed with 140,000 miles of rail, used for hauling everything from iPods to cattle.
In its monthly compilation of railroad and economic data, the American Association of Railroads shows average weekly railroad traffic grew sharply in the first four months of the year, leveled out and even declined slightly through July, and then turned sharply higher in August.
A close look at key business segments served by railroads reveals some intriguing details.
Rail shipments of intermodal containers, which largely carry goods from manufacturers to retailers' regional distribution centers, have surged. BNSF container shipments are up 9 percent for the year and up nearly 20 percent since July 1.
"When you look at these loadings, retailers have to be stocking up for the holidays," Lanigan said. Right now, many of those containers are probably loaded with manufactured goods that are ordered well in advance, such as televisions and other large consumer items.
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