MINNEAPOLIS and LOS ANGELES, Feb. 9, 2011 /PRNewswire/ -- The Ceridian-UCLA Pulse of Commerce Index™ (PCI), a real-time measure of the flow of goods to U.S. factories, retailers and consumers, fell 0.3 percent in January, giving up some, but retaining much of, December's exceptional 1.8 percent sequential gain. On a year-over-year basis, the PCI increased 3.4 percent in January, making it the fourteenth straight month of year over year growth.
Yet another factor affecting January's PCI figure is the record-breaking snowfalls being experienced in the United States this winter. From a regional perspective, the heavily traveled Northeast and North Central regions of the nation were hit particularly hard -- experiencing a "category 3" snowstorm from January 9 to January 13, and data shows that trucking was off by about one 1 to 2 percent during this affected time. It was also noted that across the regions activity was stronger at the end of the month than it was in the beginning.
"Some of December's growth was driven by an unusually strong performance during the week between Christmas and New Years," explained Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. "This combined with the treacherous winter storms likely detracted somewhat from the January result. However, when viewed in the context of a three month moving average, the PCI clearly shows that the economic recovery remains on track."
On a monthly basis the PCI tracks closely to the Industrial Production Index (to be released later this month) and GDP. For December, the PCI forecast of +.6 percent growth was very close to the Fed's reported number of .8 percent. For January 2011, the PCI forecasts +.3 percent growth in IP. Furthermore, as stated in last month's PCI report, "the surge in the December PCI makes us more positive about GDP for Q4, but still feel that GDP could come in below the current consensus (of about 3.5 percent) when released later this month," which is in fact what happened with GDP growth for the fourth quarter reported to be 3.2 percent.
"From an absolute standpoint, GDP is now slightly ahead of the previous peak reached in Q4 07. But the PCI and Industrial Production are still about 5 percent below their previous peaks - meaning that the goods producing component of GDP is still well below its previous high," said Craig Manson, senior vice president and index expert for Ceridian. "We are not yet seeing PCI growth robust enough to drive meaningful gains in employment."
Based on their experience and the PCI data, both Leamer and Manson suggests that there could be major revisions coming to the inventory and import related components within the U.S. Bureau of Economic Analysis' initial Q4 10 GDP report.
"Growth comparisons for the PCI on a year over year basis - particularly in the first half of the year - remain difficult. Nevertheless, our outlook for 2011 is for continued economic recovery and we expect GDP to grow at the historically "normal" rate of 3 percent, accompanied by a persistent level of high unemployment," added Manson.
The complete January report, regional analysis and additional commentary are available at www.ceridianindex.com or by contacting [email protected]. The site offers further detail such as index graphs and downloadable data, video commentary and sound bites, information on how the data is obtained, and the opportunity to receive updates on the latest information via e-mail and RSS feeds.
About Ceridian-UCLA Pulse of Commerce Index
The Ceridian-UCLA Pulse of Commerce Index(tm) 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. Working with economists at UCLA Anderson School of Management and Charles River Associates, Ceridian provides the index monthly and also offers companies access to more detailed fuel-use information. Ceridian is a global business services company providing electronic and stored value card payment services and human resources solutions. UCLA Anderson School of Management is perennially ranked among top-tier business schools in the world. Charles River Associates is a leading global consulting firm that offers economic, financial, and business management expertise to organizations around the world.
For additional information on the Ceridian-UCLA Pulse of Commerce Index, please visit www.ceridianindex.com.
SOURCE Ceridian-UCLA Pulse of Commerce Index