Warren Buffett says it’s the one indicator he’d want if he were stuck on a desert island
Warren Buffett says it's the one indicator he'd want if he were stuck on a desert island: the weekly index of U.S. railcar traffic compiled by the Association of American Railroads, which tells you the volume of raw materials and finished goods being carried around the country.
Why does it still matter?
Yes, railcar traffic is a very old school, 19th-century economic barometer. About three-quarters of U.S. GDP is now generated by services, and railways compete with trucks and airlines. But a recent Bank of America Merrill Lynch study found that railcar traffic tracks shifts in GDP more accurately than five other major weekly indicators–electricity output, steel production, lumber shipments, chain store sales and initial jobless claims.
How can it help you invest?
Average weekly railcar declined over the first seven months of 2015, but stock markets climbed. Were the markets getting ahead of the economy? The trend was clear well before August.