Pulse of Commerce Index is down 1.0 percent in August
September 15, 2010 - LM Editorial
Following a nearly 2 percent gain in July, the results from the most recent Ceridian-UCLA Pulse of Commerce Index (PCI) took a slight dip in August, falling 1.0 percent.
July’s PCI was up 1.7 percent, following a 1.9 percent decline in June and a 3.1 percent increase 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. 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 closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth.
“The August data is obviously discouraging after the cautious optimism created from July’s report,” said Ed Leamer, chief PCI economist, in a statement. “There is not much to feel good about with the August data in terms of the unemployment picture, but there is a silver lining in that the August PCI is still far from double-dip territory.”
The August PCI, according to the report’s authors, was up 6 percent year-over-year and has been up for 9 straight months on a year-over-year basis although annual gains have been on the decline since June. In order to reflect a “healthy job market,” the PCI needs to show a 10-to-15 percent annual growth rate, the report noted.
The report also pointed out that the August PCI is consistent with a predicted third quarter GDP growth number in the 1.5-2.5 percent range, with a GDP growth rate of 5-to-6 percent needed to sustain meaningful job creation.
The report’s authors also noted that this slow annual growth indicates that inventory restocking and strong import growth may be over, but added that manufacturing remains strong and it is still to early to determine what this means for the trucking market.
“These results could be viewed as an unimpressive economic recovery, which has been occurring for most of the year from a PCI standpoint,” said Todd Dooley, senior vice president of finance for Ceridian, in an interview. “As things stand, growth is not sufficient enough to put many people back to work.
And with the recovery largely being a jobless one to a large degree, overall economic growth can be viewed as stagnant at the present time and for the near-term, according to Dooley.
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