In a world where economists get it wrong, politicians don't get it, and the financial media just wants to cheer you up, it's comforting to know that key bellwether companies provide an objective snapshot of economic reality without a lick of spin.
Eastern U.S. railroad operator CSX
Meanwhile, the alarm bells from this bellwether sector continue to ring. CSX reported a 7% drop in overall freight volumes for the fourth quarter. While that may sound like a marked improvement compared to the full-year decline of 15%, Fools are reminded that the fourth quarter marked the first period for which year-over-year comparisons relate to the deeply impaired conditions that existed by late 2008. Understanding this perception trap is critical to the proper interpretation of comparative data.
Only three out of 10 freight categories recorded gains. Automobile volumes rose 3% thanks to the Cash for Clunkers initiative, which depleted inventories and relieved considerable strain from manufacturers like Ford
More troubling still is the mind-boggling degree of weakness in domestic demand for coal. Mining equipment manufacturer Joy Global
The decline marks a sequential erosion from even the third quarter's 18% decline, and calls into question the bottom declarations issued last summer by miners like Arch Coal
As I continue to await confirmation of the much-touted domestic economic recovery from the relevant bellwether companies, these results from CSX suggest not only a difficult journey ahead for domestic railroads -- including Warren Buffett's beloved Burlington Northern Santa Fe
More than 1,600 Motley Fool CAPS members, including 392 All-Stars, expect four-star pick CSX to outperform the S&P 500. In all, the CAPS community has shared its collective insight on 35 "road and rail" companies. Join the free CAPS community today, and share your views on how the rail industry will fare throughout these persistent economic headwinds.