Railcar loadings accelerated their recovery in September. Total U.S. railcar loads were down just -2.9% in September 2020 from September 2019, excluding coal. Intermodal average weekly loadings were 284,777 units. Up 7.1% over September 2019, and the fourth-highest single month on record. Given the circumstances, this was a very positive month for rail car loadings.
September saw an acceleration in the rail traffic pandemic recovery. In September total average weekly railcar loadings were down -9.7% over September 2019. However, excluding coal, which we have discussed in previous articles, total loadings were down just -2.9% from September 2019. Even better, Intermodal loads were above 2019 levels for a second straight month. In September, the average weekly intermodal car loadings were 284,777. A 7.1% increase over September 2019.
A -2.9% decrease is a welcome sight from the -9.9% year over year decrease of non-coal carloads in August. This can be seen in the individual category statistics as well. Of 20 commodity carload categories tracked by AAR, eight of them were up year over year in September. Since April, the highest number in any month has been three categories. Standing out, agricultural products with all four commodity categories posting annual gains. Grain specifically was up 27.8% over September 2019.
Through September, U.S. year to date total rail carloads are down -15.3% from 2019. Excluding coal, carloads are down -10%, and total intermodal carloads are down -5.9%. The question on everyone’s mind though, is what will be the pace of the recovery?
So how will the pandemic recovery continue? In short, who knows? Weekly and monthly economic indicators continue improving. However, increasing case counts and a tumultuous upcoming presidential election have market participants on all sides scratching their heads. We’ll stick to the data and leave the speculating to the experts.
The Purchasing Managers index in September posted a 55.4. It’s 4th straight month above 50. Anything above 50 indicates expansion, below 50 indicates contraction. The September jobs report showed a net of 661,000 new jobs created. While this is a drop off from the previous 1.4 and 1.7 million jobs respectively in July and August. September includes a little over 200,000 government positions coming off of payroll, meaning over 800,000 net private-sector jobs were created in September. With some drop-off in the labor force participation rate, which we covered extensively in our August article, September brought the unemployment rate to 7.9% and approximately 11,272,000 net jobs have been regained from the COVID lockdown in March and April. That leaves approximately 10.8 million jobs left to regain all of the pandemic lost jobs. The below chart details the labor force participation rate and population employment ratio against the official unemployment rate.
The slowing pace of job growth has some speculating the easy gains are in. However, consumer confidence spiked significantly back to 101.8 in September after dropping to 91.7 and 86.3 in July and August.
Housing starts continue to be a strong point with August total housing starts at an annual pace of 1.416 million. The strength in housing can be seen in the price of lumber, which is near record highs, and builder confidence surveys remain strong as consumers continuing moving to suburbs.
We will get the first reading of the third quarter GDP on October 29th. We look forward to seeing that report.
Motor vehicles & parts also eclipsed Sep 2019. A sign the auto-recovery is showing strength. In September motor vehicles & parts were up 2.5% over September 2019. While not a huge gain, anything green in this time, is positive. This can be seen in the new vehicle numbers as well. Which have returned to near pandemic levels. Other positive categories this month Farm products excluding grain, grain mill products, food products, lumber and wood products, iron and steel scrap, and waste & nonferrous scrap.
The biggest laggard continues to be crushed stone, sand, and gravel. A beleaguered U.S. shale industry is on display with September CSG carloads down 20.9% in September. Year to date CSG carloads are down -18.4% from this time last year. Only coal is worse.
Rail carloads of course remain down for the year and month, but we have come a long way from the depths of the spring.
As we continue to move forward in Pandemic recovery there are some positive notes looking ahead. We mentioned the bounce back in consumer confidence above. forward leading indicators for GDP indicate a strong third quarter, however, estimates vary widely. Which is why we are anxious to see the first release at the end of the month.
On the topic of GDP, the Federal Reserve Weekly economic indicator continues to trend up notching a reading of -4.18% during the week of 10/3/2020. The highest reading since the depths of the pandemic.
Where we go from here, is anyone’s guess. Andress Engineering Associates will continue to be here to support our customers with Trackmobile™, Modjoul™ smart belt, compressor, crane, and chiller needs.
Andress Engineering Associates has over 60 years as a Trackmobile Railcar Mover dealer and industrial Engineered equipment systems provider. We remain open and ready to support the operations of our customers. We have a fleet of Trackmobiles available for rental. Our service technicians are available 24/7/365. Our Trackmobiles, cranes, and compressors operate in some of the most critical industries supporting our economy. Our team stands ready to support your application in any way we can.