Ceridian-UCLA Pulse of Commerce Index reveals disappointing February
Results from the Ceridian-UCLA Pulse of Commerce Index™ (PCI) 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 this month enhanced to include adjustments for monthly 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.
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 trucking tracked by Ceridian Corp., a global provider of electronic and stored value card payment services and human resources solutions. 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.
“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 index is built by analysing 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.