MINNEAPOLIS — The Ceridian-UCLA Pulse of Commerce Index (PCI) staged a healthy comeback in March, with the PCI growing by 1 percent, making up for February’s snowstorm-induced decline of 0.7 percent.
The adjusted index, based on real-time diesel fuel consumption by over the road trucking, grew from 107.4 to 108.5, continuing its climb from a recessionary low of 100.7 in June 2009. With the PCI essentially flat over the first two months of the year, the March increase signals the U.S. economy remains in steady recovery. Continuing another positive trend, the March PCI shows growth over the prior year period for the fourth consecutive month. This follows twenty-two consecutive months of year-over-year declines experienced prior to December 2009.
The new PCI data also suggests that the economic growth in the first quarter was stronger than the consensus GDP forecast of 2.9 percent. Based on the PCI alone, expected GDP growth for the first quarter of 2010 is 4 percent, putting the economic indicator at the high end of forecasts (fewer than 10 percent of forecasters see GDP growth at 4 percent or greater). Trucking industry economists suggest that GDP growth above 3.5 percent means substantial growth in truck freight tonnage.
The PCI also suggests Industrial Production will grow at a healthy 0.5 percent when the Federal Reserve releases that number on April 15.
“The good news in March is that the economy is still recovering at a pace that should support job growth, although unfortunately not at a pace that will drive rapid improvement in the unemployment rate. GDP needs to grow at a 5 to 6 percent rate to drive meaningful change in unemployment,” said Ed Leamer, chief economist for the PCI.
For the first quarter of 2010, the PCI grew at an annualized rate of 9.7 percent, a solid gain but not enough to offset the declines of 14 percent and 16 percent suffered in the fourth quarter of 2008 and the first quarter of 2009. “In other words, we fell into the recession much more rapidly than we are climbing out of it,” Leamer said.
The PCI is based on an analysis of data tracked by Ceridian, which provides Comdata fuel card services.
The Ceridian-UCLA Pulse of Commerce Index by UCLA Anderson School of Management also provides data for the nine Census regions. Not surprisingly, the areas most hit by heavy snowfall in February rebounded nicely in March. The Mid Atlantic region grew by 4.3 percent in a single month, following a snow-laden decline of 2.5 percent in February. The New England and East North Central regions also had healthy growth of 2.7 percent and 1.7 percent, respectively, offsetting declines in February.
All but two of the Census regions — the West North Central (e.g. Minnesota) and the West South Central (e.g. Texas) — grew in March. Also, despite the Mid Atlantic’s rebound, it still declined 9 percent on an annualized basis for the first quarter of 2010.
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.
“March was another solid month but we need to see even stronger growth in the coming months to propel job growth in 2010,” said Craig Manson, senior vice president and index expert for Ceridian.
Additional information on the Ceridian-UCLA Pulse of Commerce Index is available at www.ceridianindex.com. The site offers further detail such as index graphs and downloadable data, video commentary, information on how the data is obtained, and the opportunity to receive updates on the latest information via e-mail and RSS feeds. The index is publicly released on or near the 10th day of each month.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
Follow The Trucker on Twitter at www.twitter.com/truckertalk.