MINNEAPOLIS, Minn. — An economic forecast that tracks truckers’ fuel purchases slipped slightly in February, edged downward by winter weather in the East.
Results from the Ceridian-UCLA Pulse of Commerce Index by UCLA Anderson School of Management show the U.S. economy essentially flat over the first two months of the year, with a February decline offsetting the modest gains previously reported for January.
With the index number for the month enhanced to include adjustments for workdays as well as seasonality, February fell 0.7 percent, following January’s increase of 0.6 percent. This flat performance follows a robust 2.8 percent gain in December.
“February was disappointing, but the geographic pattern underlying the index suggests this was due in large part to extreme snowfalls during the month,” said Edward Leamer, director of the UCLA Anderson Forecast and chief economist for the PCI. “As we indicated with the release of our January report, we still need much stronger growth in the PCI to get Americans back to work. To sustain at least a 4 percent GDP number for the first quarter, the March PCI has to be significantly stronger at over 1 percent growth. That number will be very important. It will reveal where the economy is headed and whether March truly is a catch-up month after a snowy February.”
The decline in February’s PCI prompts a lowering of expectations for the Federal Reserve’s forthcoming Industrial Production report. Based on data through January, a forecast for February’s monthly growth of Industrial Production to be released on March 15 would have been 1.0 percent. With the new February PCI data now available, that Industrial Production forecast drops to 0.6 percent.
The PCI is based on an analysis of real-time diesel fuel consumption data from over the road trucking tracked by Ceridian Corp., which provides Comdata fuel card services. The February release was enhanced from January’s release to adjust for monthly workdays, creating less volatile month to month changes in the index. The complete February report and updated index white paper are available at www.ceridianindex.com.
The Ceridian-UCLA Pulse of Commerce Index also provides data for the nine Census regions. Not surprisingly, the areas most hit by heavy snowfall — the East North Central and Mid Atlantic regions — experienced declines of -4.1 percent and -2.5 percent, respectively. In most parts of the country not directly affected by February’s snowfall, the PCI grew, up 2.7 percent in the West North Central region (e.g. Minnesota), 2.1 percent in the Pacific region (e.g. California), and 2.6 percent in the West South Central region (e.g. Texas). East-West traffic in the Mountain region was down -0.8 percent, possibly a ripple effect of snowstorms in the east.
The index is built by analyzing Ceridian’s electronic card payment data that captures the location and volume of diesel fuel being purchased by over the road trucking operations. This provides a detailed picture of the movement of products across the United States.
“Goods have to be transported for the economy to grow, so when snowstorms bog down that flow, it is reflected in our index and in the overall U.S. economy,” said Craig Manson, senior vice president and index analyst for Ceridian.
Kevin Jones of The Trucker staff can be reached for comment at email@example.com.
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