-- "Railroads shipments are the highest in almost three years, helping to defy concerns about a double- dip recession. Total rail volumes excluding grain and coal averaged 381,831 carloads in August, the most since October 2008, according to data from the Association of American Railroads.
These shipments represent the bulk of materials for industrial production, so rising volumes show the economy is still growing, according to Art Hatfield, a transportation analyst in Memphis, Tennessee, at Morgan Keegan & Co. “We’re not seeing declines in rail volumes that are synonymous with a recession,” Hatfield said. “We remain in a slow growth environment.”
The order rate for Kennametal Inc. (KMT), the No. 1 supplier of cutting tools used by manufacturers including Caterpillar Inc. (CAT) and Boeing Co. (BA), increased at a 20 percent annual pace in August, excluding acquisitions, divestitures and workdays, the company said in a Sept. 15 statement. Kennametal’s end markets “continued to reflect strong demand,” and its industrial business showed “ongoing strength,” the company said.
The Latrobe, Pennsylvania-based company is a “good barometer” for industrial production, according to Sheila Kahyaoglu, a New York-based analyst at Credit Suisse Group AG. Kahyaoglu maintains an “outperform” rating on the stock because its order rate, while poised to slow, will continue to grow at a rate faster than consensus forecasts."
MP: The chart above of intermodal containers shows that the increases in rail activity through August reported by Bloomberg for monthly rail traffic have continued into September based on more recent weekly data. For the week ending September 17, the volume of 242,250 intermodal trailers and containers reached the highest level of the year, and the highest level since 2008.