The Ceridian-UCLA Pulse of Commerce Index 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.

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. Data shows that trucking was off by about one 1 to 2 percent during this affected time, and 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."

"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 believe 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