The U.S. economy slowed in January after a significant growth spurt in December, says a new economic index based on diesel fuel consumption by truckers.
The Ceridian-UCLA Pulse of Commerce Index fell at an annualized rate of 36.8 percent in January, suggesting caution about celebrating the recently announced 5.7 percent GDP growth number for the first month of 2010, said Edward Leamer, director of the UCLA Anderson Forecast and chief economist for the Ceridian-UCLA Pulse of Commerce Index.
“Things are going to have to look a lot better in February and March to turn this worry into optimism about the power of recovery,” Leamer said.
“We’re not seeing the consistent positive momentum generally considered necessary to significantly improve the labor market,” said Leamer. “All signs point to a weak economic recovery, too slow to drive down the unemployment rate.”
Leamer noted that the three-month moving average for January showed a 3.3 percent gain at an annualized rate, compared with a 14.6 percent gain in December.
“Though the January 2010 number is disappointing, the index is 3.6 percent above its January 2009 level and is similar to year-over-year pre-recession values,” he said. The three-month average also is 2.3 percent higher than a year ago, the first year-over-year increase since April 2008, “21 very difficult months ago,” he said.
The high December number may reflect delayed purchasing and shipments for the holiday season, as the index did not see the usual holiday restocking uptick in October, Leamer said.
The PCI also tracks economic growth in nine regions established by the U.S. Census. The regions reflected the national average, with only the East South Central region experiencing better growth than the previous month. While five other regions continued to experience growth in the movement of goods, the pace had dropped from high December values, according to the index.
The Pulse of Commerce index, which closely follows the Federal Reserve’s Industrial Production Index, is based on data from Ceridian’s electronic fuel card system, which captures the location and volume of diesel fuel being purchased by trucking companies. “Goods have to be transported for an economy to grow, so it will be important to monitor this index to see if the economy is really on the move,” said Craig Manson, senior vice president at Ceridian.
The PCI is a collaborative effort of Ceridian, the UCLA Anderson School of Management and Charles River Associates, a consulting firm.
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