Tags: UCLA | Pulse | Diesel | Index

UCLA Pulse: Diesel Index Shows Uncertain Growth

Wednesday, 10 Aug 2011 01:03 PM

The Ceridian-UCLA Pulse of Commerce Index (PCI) , a real-time measure of the flow of goods to U.S. factories, retailers and consumers, dipped 0.2 percent in July on a seasonally and workday adjusted basis, offsetting some of the relatively strong 1.0 percent gain posted in June.

The Ceridian-UCLA Pulse of Commerce Index, issued Wednesday by the UCLA Anderson School of Management and Ceridian Corp., is based on real-time diesel-fuel consumption data for over-the-road trucking and serves as an indicator of the state and possible future direction of the U.S. economy.

By tracking the volume and location of fuel being purchased, the index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers.

“In July, the U.S. economy remained in ‘she loves me, she loves me not’ mode,” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast.

“July’s result falls in the ‘she loves me not’ category and represents a continuation of the idling economic conditions that have persisted for over a year. Over this time period, bad news has been alternating with good, leaving investors and forecasters nervous and unable to identify sustainable trends.”

“The PCI has started the second half of 2011 on a slightly down note, and wobbly, slow growth is expected to continue for the rest of this year as the economy struggles to find a catalyst,” Leamer continued.

“However, another dip appears unlikely, as the traditional sources of recessions – homes and automobiles – are not currently positioned to produce a downturn.”

The PCI continues to prove its value as a predictor of both GDP growth and industrial production. Last month, the PCI result further reinforced our long-held cautious outlook for below consensus growth in GDP. The PCI forecast for below consensus GDP growth was confirmed by the U.S. government’s subsequent estimate of 1.3 percent GDP growth for the second quarter.

“Over time, the PCI has also proven to be a leading and amplified indicator of industrial production,” explained Craig Manson, senior vice president and Index expert for Ceridian.

“For June, the PCI was anticipating industrial production to show modest growth of 0.17 percent. The government’s subsequent release on July 15, 2011, turned out to be 0.19 percent, which was almost identical to our forecast. This represented the fifth time in the past six months in which the monthly PCI forecast for U.S. industrial production was right in-line with the government’s subsequent report. Based on the weakness evident in the PCI over the last several months, our forecast calls for a flat performance in July industrial production when the government estimate is released on August 16.”

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The Ceridian-UCLA Pulse of Commerce Index (PCI) , a real-time measure of the flow of goods to U.S. factories, retailers and consumers, dipped 0.2 percent in July on a seasonally and workday adjusted basis, offsetting some of the relatively strong 1.0 percent gain posted in...
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2011-03-10
 

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