Ceridian-UCLA Pulse of Commerce Index shows slight gain in April

The most recent edition of the Ceridian-UCLA Pulse of Commerce Index (PCI) showed a 0.1 percent gain in April, marking the sixth monthly increase in 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.

April’s 0.1 percent increase was preceded by gains of 0.3 percent and 0.7 percent in March and February, respectively. Even though these three months show cumulative growth, it is down compared to the previous three months—December, January, and February—by 1.2 percent at an annualized rate, the report noted. And that January-March period was down 4.9 percent compared to the previous three month period of October-December at a 4.9 percent annualized rate.

“The [PCI] continues to be soft,” said Ed Leamer, chief economist for the Ceridian-UCLA Pulse of Commerce Index and Director of the UCLA Anderson Forecast. “It suggests that the growth in the components of the economy that depends upon trucking is not strong.”

Following the recessionary period of 2008-2009, Leamer said there was strong growth in trucking, which was driven by inventory rebuilding, but it then subsequently flattened out to a large degree during the summer of 2010. And since that time, he explained, trucking in general has had a difficult time regaining its previous traction.

This is exemplified to a degree with relatively flat truck tonnage volumes being reported by the American Trucking Associations and various truckload and less-than-truckload carriers in recent months.

Looking ahead to the middle of the year, Leamer said that the PCI could show more material gains should housing market activity pick up in a meaningful way.

“There is a lot of trucking activity involved in the housing industry, so there ought to be some improvements there,” he said.

And the impact of higher energy costs in the form of diesel prices, while it has slowed down somewhat in recent weeks, requires truckers to use more diesel to move freight the same distance as they previously did. This, he said, reduces the amount of freight truckers can move from point A to point B, because consumers are spending less overall.

Even with decent job growth in the last year and improving retail sales, too, Leamer said these things speak directly to the point that there are several economic indices that are faring better than trucking-related ones on an annual basis, more so than annually.

“Trucking represents a very mixed group of economic activity, including housing,” he said. “All the components of GDP are basically where they previously were, except for housing which is down 35 percent. If housing comes back more, more trucking activity will follow.”