Ceridian-UCLA Pulse of Commerce Index falls 0.3 percent in January
February 09, 2011 - LM Editorial
Following an impressive 2.4 percent sequential gain in December, the January edition of the Ceridian-UCLA Pulse of Commerce Index (PCI) fell 0.3 percent in January, due, in part to harsh weather conditions throughout much of the United States.
The index has been down on a sequential basis four of the last six months.
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.
And the PCI closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth.
“Though the January 2010 number is disappointing, the index is 3.6 percent above its January 2009 level and is similar to year-over-year pre-recession values,” said Edward Leamer, director of the UCLA Anderson Forecast and chief economist for the Ceridian-UCLA Pulse of Commerce Index, in a statement. “Also, the three-month moving average is 2.3 percent above the previous year’s value, which is the first time that there has been a year-over-year increase since April 2008, 21 very difficult months ago.”
The PCI is up 3.6 percent compared to January 2010, representing the 14th straight month of annualized growth. Several of the annual growth months in 2010 were up against weak 2009 comparisons.
The report also pointed out that the three-month moving average for the PCI is up 2.3 percent annually. And this month’s report noted how the PCI is expecting a 0.3 increase in industrial production for January, with December coming in at 0.6 percent, which was in line with the Federal Reserve’s 0.8 percent tally. January industrial production data from the Federal Reserve will be released on February 16.
“At the macro level, the economy is continuing a slow and steady recovery,” said Todd Dooley, Ceridian Senior Vice President of Finance, in an interview. “We are not as concerned about a double-dip recession as we were a year ago. The general consensus in the marketplace in 2011 varies between 3-to-5 percent growth, and we are at the low end of that range.”
Having year-over-year growth in January for the last two years is helping to create optimism, noted Dooley. The weather led to an unseasonal dip in activity during the first half of the month, while the second half was much stronger. Dooley said that the elements also led to low job creation numbers for the month as well.
While the underlying PCI data supports the thesis of a slow and steady economic recovery, Dooley said it is highly unlikely to see PCI growth in the 10 percent range anytime soon, which is what is required to spur employment growth. Instead, it is more likely that growth in the coming months will be in the zero-to-1 percent range, keeping the PCI in line with current industrial production numbers.
“The first half of 2010 was particularly strong on an annual growth basis,” said Dooley. “It stalled out in the summer months and came back in the fourth quarter. 2010 was a strong year for growth and recovery, but the trends now are suggesting a more normal growth pattern for the economy, but it is not the typical economic growth pattern we see when we come out of a recession.”
For more articles on the Ceridian-UCLA Pulse of Commerce Index, please click here.
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