The US garbage indicator is sending a positive sign for the economy

One of the more unusual-but-intuitive economic indicators is garbage.

More specifically, AAR rail waste carloads — aka the carloads of trash that are sent by rail to landfills in the US.

The coincident indicator has historically had a pretty tight correlation with GDP in the US, as economist Michael McDonough noted several years back. This makes sense given that if consumers are buying more stuff, they're also likely to be throwing out more garbage.

The most recent readings show that waste carloads have been accelerating in 2016, which Deutsche Bank's Torsten Sløk argued points "to a solid economic expansion ahead."

Here's the chart, showing waste carloads in blue and real US GDP in red.

garbage COTD

(Deutsche Bank)

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