U.S. rail traffic still down sharply: industry group

WASHINGTON (Reuters) - U.S. rail traffic remains sharply down from a year ago, a trade group said, but shipments in some industries have shown improvement.

Carloadings on major U.S. railroads in the week ended October 31 dipped 13.7 percent from a year ago, the Association of American Railroads said in its weekly report.

But at 275,439 carloads, traffic was down 18.2 percent from the same week in 2007 -- before the recession hit.

A quick, widespread recovery is unlikely as modest increases in rail traffic from week to week have yet to push shipments up to pre-recession levels.

However, industry demand is showing steady improvements, with shipments of some commodities the association tracks managing to exceed year-ago levels.

U.S. carloads of grain mill products were 9.9 percent above the year-ago week, while chemical shipments were up 3.6 percent, the report said. Shipments of waste and scrap materials edged up 0.7 percent, and carloads of nonmetallic minerals inched up 0.3 percent from last year.

Consumer product-focused intermodal traffic transported 203,860 loaded truck trailers and shipping containers on flat railcars in the week, down 11.1 percent from 2008 and 15.5 percent from 2007.

Prospects for improved intermodal activity look good as other data point to the labor market healing and retail sales picking up.

The Labor Department reported that new weekly jobless claims fell to a 10-month low, but the seasonally adjusted number of workers filing claims still exceeded 500,000. [ID:nN05106320] A separate report from ADP Employer Services LLC showed private sector employers cut jobs at the slowest pace in more than a year. [ID:nN04349022]

Though October same-store sales fell short of analysts' expectations for 52 percent of U.S. retail chains, the 1.8 percent rise in sales for the month was the strongest showing since June 2008 as consumers are stepping up their shopping.

Total U.S. freight transportation in the first 10 months of 2009 reached an estimated 1.229 trillion ton-miles, trailing roughly 17 percent from the same 2008 and 2007 period. The ton-mile is a unit used by the association and represents one ton of freight hauled one mile.

By Jasmin Melvin