New data from the Association of American Railroads (AAR) suggests the U.S. freight economy may be entering a more stable phase after months of uncertainty.
According to the group’s latest analysis, rail carloads increased 6.5% year-over-year in February, driven by higher shipments of grain, coal and industrial commodities.
Intermodal traffic also showed signs of recovery, with weekly average volumes reaching a record high for the month of February, rising 1.5% year-over-year.
The figures reflect broader economic signals that suggest the U.S. economy may be heading toward a soft landing, according to Rand Ghayad, chief economist at the AAR.
Manufacturing indicators have also improved. The ISM Manufacturing PMI reached 52.4% in February, marking the second consecutive month above the 50% expansion threshold.
At the same time, the new orders index rose to 55.8%, while the backlog of orders index climbed to 56.6%, its highest level since mid-2022.
Rail freight demand is closely tied to industrial activity, making these indicators particularly relevant for the sector.
Coal remained the largest commodity category, accounting for 26.6% of non-intermodal rail traffic, supported by colder weather, stronger electricity demand and rising natural gas prices.
Grain shipments also surged, reaching their highest February weekly average since 1990, largely due to strengthening export demand.
Chemical shipments, meanwhile, reached a record monthly level, building on a strong performance in 2025.
Despite these positive signals, uncertainty remains. The U.S. unemployment rate rose to 4.4% in February, near a five-year high, although layoffs remain relatively limited and real wage growth continues to support consumer spending.
The Federal Reserve is expected to keep interest rates unchanged between 3.5% and 3.75%, giving policymakers time to assess the economic impact of geopolitical tensions and inflation trends.
For the rail industry, the coming months will reveal whether the recent improvement in freight volumes can translate into a sustained recovery.
