PMI increases in October. Manufacturing continued to grow in October and at an accelerated rate, as the Purchasing Managers Index (PMI) registered 56.9 percent, an increase of 2.5 percentage points when compared to September’s reading of 54.4 percent. A reading above 50 percent indicates the manufacturing economy is generally expanding; below 50 percent indicates it’s generally contracting.
Freight-car loadings up 7.3 percent in early November. One of Warren Buffett’s favorite economic indicators, the amount of material being shipped by railroads, continued improving during the week ending Nov. 6. The Association of American Railroads (AAR), Washington, D.C., publishes a weekly report on the subject and it said weekly rail traffic continues to see modest year-over-year gains, with U.S. railroads originated 288,056 carloads for the week ending Nov. 6, 2010, up 4.9 percent compared with the same week last year. For the first 44 weeks of 2010, U.S. railroads reported cumulative volume of 12,612,717 carloads, up 7.3 percent from last year.
Truck tonnage increases 1.7 percent in September. Another one of Warren Buffett’s favorite economic indicators is the amount of freight that trucks are hauling. The American Trucking Associations (ATA), Arlington, Va., measures this with its For-Hire Truck Tonnage Index. This index increased 1.7 percent in September after falling a revised 2.8 percent in August. The latest gain put the index at 108.7 in September, up from 106.9 in August. Compared with September 2009, tonnage climbed 5.1 percent, which was well above August’s 2.9 percent year-over-year gain. Year-to-date, tonnage is up 6.1 percent compared with the same period in 2009.
ATA Chief Economist Bob Costello said that truck tonnage over the last few months fits with an economy that is growing very slowly. “While tonnage grew in September, truck freight volumes leveled off over the summer and early autumn. This is a reflection of an economy that is barely growing.”
Costello noted again this month that the trucking industry is significantly smaller than it was prior to the recession, but as a result, is better equipped to deal with slower than normal tonnage growth.