A monthly index that gauges economic activity by tracking truck drivers' fuel purchases rose in November after three consecutive down months, an improvement that still does not persuade the index's keepers that sustainable economic gains are imminent.
The Ceridian-UCLA Pulse of Commerce Index (PCI), published by UCLA's Anderson School of Management, is based on data from fuel credit cards swiped by drivers as they fill their rigs. The database, created by Ceridian Corp., a human resource, payroll, and benefits specialist, captures and analyzes the location and volume of fuel being purchased as a way of measuring the flow of goods to U.S. factories, retailers, and consumers. Because the data are tracked in real time, UCLA and Ceridian say, the index paints an accurate picture of product flow across the United States and, by extension, overall economic activity.
The index grew 0.4 percent in November after three straight months of decline. However, the November data were not strong enough to make up for the PCI's 0.6-percent decline in October or the 2.1-percent decline experienced since July, according to the managers of the index.
"While the PCI's most recent data shows growth, it is not substantial enough to offset the loss from the third quarter," said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast, in a statement. "In short, November's 'up' is relative to a low bar, so the growth is only mildly encouraging. The flatness we're seeing with the latest PCI data reflects inventories in motion, which seem to be signaling a weak fourth quarter."
Year over year, the PCI increased 4.5 percent in November, representing the 12th straight month of annualized growth. This is slightly above the growth rates from 2004 to 2006, but below levels required for a rapid recovery to the previous peaks in 2007–2008 and an equally swift return to trend growth, the index managers said.
"There has been less anxiety about the economy in recent months, but markets are still fragile," said Craig Manson, senior vice president and index expert for Ceridian, in a statement. "We still have not seen evidence of enough growth to instill confidence in the economic outlook for the fourth quarter and early 2011."
The index also showed that five of the nine Census regions showed growth in November, compared with only one region in October. The Pacific and Mountain regions exhibited the strongest month-over-month growth, according to the index.
"Right now, trucking looks good in various regions of the U.S.," said Leamer. "However, it could be symptomatic of national economic weakness, as imports from abroad can hold back domestic job formation in manufacturing and other sectors."