MINNEAPOLIS, Minn. — With a monthly increase not seen since February 1999, the Ceridian-UCLA Pulse of Commerce Index (PCI) climbed 3.1 percent in May. The increase represents the strongest indicator yet from the PCI that the U.S. economy is on the upswing, according to the UCLA Anderson School of Management report.
The May results suggest the recovery is on pace for GDP growth in the healthy range of 3 to 5 percent for the second quarter of 2010, moving closer to the 5 to 6 percent increase necessary to drive down the unemployment rate. Industry economists look for a GDP growth rate of 3.5 percent to drive significant freight improvement.
The year-over-year PCI number jumped 9 percent, adding a sixth straight month of positive year-over-year PCI comparisons.
“Absent good news from the usual recovery indicators — consumer optimism expressed by buying homes and cars, and business optimism expressed by hiring — the spike in the PCI is indeed very welcome news for the economy,” said Ed Leamer, the PCI’s chief economist. “One month does not make a trend, but at least we are back in a recovery groove.”
The May result makes up for April’s decline of 0.3 percent and for the PCI’s flat, overall performance during the first four months of 2010. It improves growth expectations for the Federal Reserve’s monthly Industrial Production (IP) economic indicator, which the PCI tracks. The slowdown in the PCI from January through April of this year was matched by sluggish growth in the IP index. Each month, the PCI lowered its growth expectations for the IP, but the May IP release is now forecast to increase by 0.85 percent, up from 0.59 percent.
The PCI is based on an analysis of real-time diesel fuel consumption data from over the road trucking tracked by Ceridian, through its Comdata card services. By analyzing payment card data for the location and volume of diesel fuel purchased by truck operators, the PCI is designed to provide a detailed picture of the movement of goods and materials across the United States.
The Ceridian-UCLA Pulse of Commerce Index also provides data for the nine Census regions. All but one region shared in the strong growth of the May PCI results.
The Middle Atlantic region (e.g. New York and Pennsylvania) dropped from 0.8 percent to 0.6 percent but all other regions experienced an increase. For instance, the East North Central region (e.g. Ohio and Michigan) surged 6.2 percent and on the low end of the range, the Mountain region (e.g. Arizona and Colorado) climbed 1.5 percent over April.
“The uptick in trucking activity during the month was apparent nationwide,” said Craig Manson, senior vice president and index expert for Ceridian. “More importantly, even though we’re still well below 2008 levels, the positive year-over-year growth trend in the index over the past six months is encouraging.”
The complete May report and additional commentary is available at www.ceridianindex.com . 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.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
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