The Ceridian-UCLA Pulse of Commerce Index, which measures fuel sales as an economic indicator, fell .5 percent in September after falling 1 percent in August,
which is the first time the index has experienced a consecutive monthly decline since January 2009.
Furthermore, August and September 2010 together produced the worst combined two-month decline since the recessionary months of January and February 2009.
The decline indicates four consecutive months of limited to no increases in over-the-road truck shipments since the PCI peaked in May. Index analysts say the PCI forecasts GDP growth in the third quarter of 2010 at an anemic 0.7 percent to 1.7 percent, below the PCI's previous 1.5 to 2.5 percent estimate reported last month (which at the time approximated the consensus economic view).
"The PCI tells us that inventory is stalled on the nation's thoroughfares," said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. "Our economy's loss in traction is alarming and for the 'Cassandras of the double-dip,' may foretell a coming decline in GDP and spike in unemployment. However, with residential investment, consumer durables, business spending, and other component indicators already at or near record lows relative to GDP, it remains unlikely that we will experience an outright decline into recession."
The PCI began 2010 strongly with the first quarter 9.7 percent above the fourth quarter of 2009. However, the second quarter was only 6.2 percent above the first, and now the third quarter has increased a mere 2.1 percent above the second.
"The ray of hope is that year-over-year (September 2010 to September 2009) the PCI is up 5.8 percent, representing the tenth straight month of growth," said Craig Manson, senior vice president and index expert for Ceridian. "Year-over-year growth, however, has continued to fall since May's exceptional 9 percent number. And though we remain in recovery, the tepid growth says our economy lacks the energy to drive employment in the near term."
From the May 2010 high, year-over-year growth in the PCI hit 8.6 percent in June, 8 percent in July, 6 percent in August and now 5.8 percent in September. PCI results need to reach 10 to 15 percent year-over-year growth for a healthy job market, according to the index analysts.
"October data will be especially telling as this is the peak month for America's trucking industry and a strong prelude to the holiday season. We'll be eager to see what the PCI reports this time next month," added Manson.
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. 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.
The complete September report and additional commentary are available at www.ceridianindex.com.
which is the first time the index has experienced a consecutive monthly decline since January 2009.
Furthermore, August and September 2010 together produced the worst combined two-month decline since the recessionary months of January and February 2009.
The decline indicates four consecutive months of limited to no increases in over-the-road truck shipments since the PCI peaked in May. Index analysts say the PCI forecasts GDP growth in the third quarter of 2010 at an anemic 0.7 percent to 1.7 percent, below the PCI's previous 1.5 to 2.5 percent estimate reported last month (which at the time approximated the consensus economic view).
"The PCI tells us that inventory is stalled on the nation's thoroughfares," said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. "Our economy's loss in traction is alarming and for the 'Cassandras of the double-dip,' may foretell a coming decline in GDP and spike in unemployment. However, with residential investment, consumer durables, business spending, and other component indicators already at or near record lows relative to GDP, it remains unlikely that we will experience an outright decline into recession."
The PCI began 2010 strongly with the first quarter 9.7 percent above the fourth quarter of 2009. However, the second quarter was only 6.2 percent above the first, and now the third quarter has increased a mere 2.1 percent above the second.
"The ray of hope is that year-over-year (September 2010 to September 2009) the PCI is up 5.8 percent, representing the tenth straight month of growth," said Craig Manson, senior vice president and index expert for Ceridian. "Year-over-year growth, however, has continued to fall since May's exceptional 9 percent number. And though we remain in recovery, the tepid growth says our economy lacks the energy to drive employment in the near term."
From the May 2010 high, year-over-year growth in the PCI hit 8.6 percent in June, 8 percent in July, 6 percent in August and now 5.8 percent in September. PCI results need to reach 10 to 15 percent year-over-year growth for a healthy job market, according to the index analysts.
"October data will be especially telling as this is the peak month for America's trucking industry and a strong prelude to the holiday season. We'll be eager to see what the PCI reports this time next month," added Manson.
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. 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.
The complete September report and additional commentary are available at www.ceridianindex.com.
Read more about
Economy
media brand
0 Comments
See all comments