Ceridian-UCLA Pulse of Commerce Index up 1.0 percent in June
July 13, 2011
Evidence regarding the uneven economic recovery remains apparent, according to the most recent results of the June edition of the Ceridian-UCLA Pulse of Commerce Index (PCI) Index.
The PCI was up 1.0 percent in June, following consecutive declines in April and May. This was the second month in 2011 it showed growth, with March up 2.7 percent being the other, and it has been down 7 of the last 12 months. On an annual basis, June was up 2.0 percent and May was flat, marking the first time in 16 months the PCI did not see annual growth.
The PCI, according to Ceridian and UCLA, is based on an analysis of real-time diesel fuel consumption data from over-the-road trucking and is tracked by Ceridian, a provider of electronic and stored value card payment services. The PCI data is accumulated by analyzing Ceridian’s electronic card payment data that captures the location and volume of diesel fuel being purchased by trucking companies. It is based on real-time diesel fuel purchases using a Ceridian card by over the road truckers at more than 7,000 locations across the United States.
The PCI also closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth. For June, it is calling for industrial production to be up 0.17. The Fed’s number will be released on July 15. Ceridian officials said that May was the fourth time in the previous five months leading up to it that the PCI forecast for industrial production was “right in line” with the government’s data.
“Over the past year the U.S. economy has been in ‘she loves me, she loves me not’ mode,” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast, in a statement. “Bad news has been alternating with good, leaving investors and forecasters nervous and unable to identify sustainable trends.”
And over the last seven months Leamer pointed out that GDP and payrolls have shown wobbly growth, failing to drive a real recovery or reduction in the unemployment rate.
While this month’s 1.0 percent increase in the PCI could be the start of a positive trend, he said it is too early to tell, given the many false starts experienced over the last year which could spell ongoing uncertain economic growth.
As LM has reported, the renewed economic slowdown appears to be gaining traction in recent weeks, as evidenced by flattish retail sales, a still-struggling housing market, and high gasoline prices, which have seen some moderation in recent weeks but are still up roughly $1.00 year-over-year.
While growth in June provides optimism, the rollercoaster ride for the PCI remains intact, said Todd Dooley, Ceridian senior vice president of finance, in an interview.
“It is still a very choppy ride in the economy,” he said. “We still see GDP growth at 1.5-to-2 percent. Until more people get back to work, unemployment is not going to materially change, which means the economy will continue to have these fits and starts.”
On a more positive note, Dooley said that the second half of 2010 saw PCI numbers soften up from the first half, which was buoyed by inventory replenishment. This, he said, should lead to easier annual comparisons for the second half of this year. If June levels hold, Dooley said the second half could be positive in terms of growth.
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