Transportation news: Pulse of Commerce Index is down 1.9 percent
July 19, 2010
Even though various metrics of late indicate the economy maybe slowing down, a recent decline in a transportation-focused economic survey does not necessarily make it so.
The most Ceridian-UCLA Pulse of Commerce Index (PCI) was down 1.9 percent in June following a 3.1 percent bump in May.
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.
The PCI closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth.
“While June’s number is substantially down, erasing two-thirds of May’s great gain, the daily and weekly activity on which the monthly PCI is based does not suggest that the economy is heading over a cliff,” said PCI Chief Economist Edward Leamer in a statement. “Part of the apparent strength of May and weakness in June is the result of the Memorial Day holiday occurring on the last day of May, allowing the negative Memorial Day effect which is usually confined to May to leak into June. More importantly, the June weakness was confined to the first two weeks, and by the second half of June, we were seeing strong growth again.”
While June was down more than 3 percent, the last two months of the PCI show a growth rate slightly more than 1 percent, which translates to a moderate economic recovery of 2.5-to-3 percent, according to Todd Dooley, senior vice president of finance for Ceridian.
And with Memorial Day coming on the latest date in May it has for the last ten years, coupled with trucking activity around Memorial Day slowing down for about a week to ten days, June results were negatively impacted and June was artificially high, said Dooley.
“When you look at May results compared to June results over the last ten years, you are seeing growth rates in the mid-to-upper single digits in the second half of June on a year-over-year basis,” said Dooley. “And when we average the two months together we do not see a double-dip recession; we do see moderate economic growth and have seen seven straight months of year-over-year growth in the PCI, with June up 8.7 percent annually.”
Despite recent economic indicators that suggest first half economic growth will be carried over into the second half, Dooley said trucking volumes remain solid, adding there are no major concerns at the moment because during a recovery some months bear stronger numbers than others.
The June PCI reported that the index grew 6.2 percent in the second quarter, which was down compared to previous quarters, and represents a second quarter GDP growth rate of 2.5 percent.
And since the second of 2009 when manufacturers were active replenishing inventories, which brought about an increase in quarterly PCI data with more trucking activity, inventory build up has since started to decline, resulting in a quarterly drop, according to Ceridian.
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