CHART OF THE DAY
The Ceridian-UCLA Pulse of Commerce Index (PCI) was released today. While the three-month moving average of industrial production increased mildly from last month read of 95.58 and aligns with other recent increases in manufacturing indexes; the Pulse of Commerce three month average declined for a third month in a row.
Ed Leamer, Director, stated: “It seems difficult to square the behavior of the PCI with the evident improvement in a number of economic indicators, most notably the increase in payroll jobs and decrease in initial claims for unemployment. The PCI also appears out-of-sync with Industrial Production and Real Retail Sales which continue to grow in a healthy manner while the PCI is stalled out. We believe, however, that the year-over-year changes in the PCI are in fact in sync with the overall economic picture.“
The important note here is that the year-over-over percentage change in the PCI index has declined sharply from its peak in 2010. Furthermore, industrial production tends to lag the PCI index as inventory stockpiles are worked through. In past history of the index sharp declines in the YoY PCI index have typically been precursors to recessionary spats. The next couple of months should begin to give us more insight into the overall direction of the economy.
[Note: The Ceridian-UCLA Pulse of Commerce Index® 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.]