When Warren Buffett was asked to identify one economic indicator that he would consider most relevant for evaluating overall economic conditions if he was stranded on a desert island for a month and had no other access to information. He immediately mentioned rail car loadings as a top candidate for this “desert island indicator”, and has made similar comments in the past.

Today, growth in railroad-shipping volume shows the U.S. economic expansion is gaining momentum, even with rising energy prices in the first quarter.

Total rail volumes excluding grain and coal shipments rose 7.9 percent to 4.6 million carloads in the quarter ended March 31, according to data compiled by the Association of American Railroads in Washington. It was the second-highest increase in a first quarter, following last year’s 9.3 percent rise.

Manufacturing output, which makes up 75 percent of all industrial production, rose 0.6 percent in February, the eighth consecutive monthly increase, according to Fed data released last month.

The gains in the rail industry show the economy was able to withstand shocks such as severe winter weather, unrest in the Middle East, the earthquake and tsunami in Japan and higher gasoline prices in the first quarter.

Shayne Heffernan

www.livetradingnews.com

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Posted by Shayne Heffernan on Apr 13th, 2011and filed underEquities, Latest News, Markets, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site