The Ceridian-UCLA Pulse of Commerce Index was essentially flat in November, despite stronger economic activity and higher retail sales. The index rose 0.1 percent from October, after rising 1.1 percent that month from September.
The deceleration in the index, which is based on over-the-road purchases of diesel fuel through the Ceridian electronic fuel card network, may have more to do with better inventory management than a weakening economy last month.
“The continuing weakness in the PCI is out-of-sync with real retail sales,” said Ed Leamer, chief economist for the index and director of the UCLA Anderson Forecast. Through October, real retail sales rose 3.6 percent, while the PCI rose 1.3percent.
That “disconnect” suggests retailers are managing inventory in their supply chains more efficiently, Leamer said. “Therefore, shoppers can anticipate fewer bargains in the month ahead and relatively little stock left for the after-Christmas sales.”
Slower growth in the index could indicate trucking’s “peak” shipping season actually peaked in October, as retail goods moved to stores and final distribution points ahead of the post-Thanksgiving “Black Friday” sale and online sales.
There are signs retailers entered the holiday season with minimal stockpiles, hoping to avoid deep markdowns. Retailers’ seasonally adjusted inventory-to-sales ratio in September was 1.39, the lowest for the month in more than two decades.
It will be important, Leamer said, to track December’s retail data “to confirm whether or not a new holiday seasonal pattern of last-minute inventory stocking has formed, as experienced in December 2010 and 2009.”