Ceridian Launches New Economic Indicator to Track the U.S. Economy
Ceridian Corporation today announced the release of a new economic indicator, the Ceridian-UCLA Pulse of Commerce Index™ by UCLA Anderson School of Management, developed in conjunction with economists at UCLA Anderson School of Management and Charles River Associates. It is a first of its kind indicator tracking the state and possible future direction of the U.S. economy. Ceridian today simultaneously announced the January index results, which showed a drop in January after a significant increase in December.
The Ceridian-UCLA Pulse of Commerce Index (PCI) is based on real-time diesel fuel purchases using a Ceridian card by over the road lorry drivers at more than 7,000 locations across the United States. The index is issued monthly and captures the real-time monitoring of the movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. It mirrors closely the Federal Reserve's Industrial Production Index. National PCI data on a monthly basis starting in 1999 will be available, along with regional breakdowns based on the nine U.S. Census regions, at the website www.ceridianindex.com.
Through Ceridian's electronic card payment services for transportation industries, Ceridian is able to track and analyse the volume of fuel being used by truckers on a yearly, monthly, weekly and daily basis. Each transaction acts as a sensor for data, with each card swipe adding to the data set for the index. Ceridian processes millions of these fuel transactions each year, and the data provides a compelling story about the status and possible direction of the U.S. economy.
"Ceridian saw the underlying value of the 10 years of data we have been collecting, and UCLA and Charles River Associates helped to validate this through in-depth econometric analysis," said Craig Manson, senior vice president and index expert for Ceridian. "Beyond the insight the index provides on the economy, we think several audiences will find other business benefits from analysing its results."
Some economic indicators have a lag time or are based only on surveys of business leaders' attitudes. Those who fill out these surveys sometimes have mixed incentives to get the information right, and often these indices require revisions later. The Ceridian index instead is based on real-time, actual consumption data that provides fact-based insight into the economy well before the monthly Industrial Production number is issued; no revisions are expected because it uses real data in real time. This insight will help businesses and other interested parties get a jump on what's happening inside the U.S. economy.
"We feel our index, along with a monthly detailed report, will give our customers, government leaders and other businesses meaningful insight into what's happening in the U.S. economy," stated Greg MacFarlane, executive vice president and chief financial officer for Ceridian. "This insight is invaluable as businesses, manufacturers, retailers and municipalities determine strategy, plan for growth, or prepare for economic changes."
Edward Leamer, director of the UCLA Anderson Forecast and chief economist for the Ceridian-UCLA Pulse of Commerce Index, said: "When I realised we had the ability to capture more than 7,000 real-time sensors on the U.S. Interstate highway system, I knew we had something special. This will be an important indicator for economists and businesses to watch."