US Economy

BNSF Rail freight update.

Regular readers will be familiar with this chart. Updated to end April. Points of interest. Vehicles are still going gangbuster! However, as you can see, Metals and Metallic Ores have started a downward trend in the last few weeks. Housing materials have seen an uptick over the same period. Food, having been growing at an annual rate of 4% earlier in the year, has turned negative year on year. The total volume (black dotted line) year on year rate has declined from its spring peak every week since March 10th. Interestingly, Food has a good correlation with total volume. All in all, to my mind, this chart confirms my continued belief that the record warm winter America breaks records…Swinter in USA drew demand forward. If economic expansion is to be resumed, car sales will have to be maintained at the current strong pace and housing starts will need to grow further. I have mentioned on many occasions that with the US budget deficit growing at an unsustainable pace the tailwind of government debt growth will turn to be a significant headwind. If you want to see what that turnaround looks like, you need look no further than Europe.

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Friday, May 4th, 2012 BNSF, US Economy

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