AAR: Correlation Between Consumer Confidence and Rail Carloads of Lumber

Below is a excerpt from Rail Time Indicators December 2011.

We note above that the more confident consumers are about their job prospects, income, etc., the more likely they are to make big-ticket purchases. Thus, it shouldn’t be surprising, as we’ve shown in previous issues of RTI and again in the top row of charts below, that there’s a strong positive correlation between consumer confidence, on one hand, and housing starts and auto sales on the other. And because there’s also a strong positive correlation between auto sales and rail carloads of autos and auto parts, and between housing starts and rail carloads of lumber and wood products, it stands to reason that there should be a strong positive correlation between consumer confidence and rail carloads of autos and lumber. That is, in fact, the case, as the bottom charts below show.

Consumer Confidence vs. Housing Starts January 2006 - November 2011

Consumer Confidence vs. US+Canadian Carloads of Lumber and Wood Products

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