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Thursday, March 28, 2024

Pulse of Commerce Index: A 0.3% Rise in March, But Down for the Quarter

Courtesy of Doug Short.

The latest Ceridian-UCLA Pulse of Commerce Index (PCI), a measure of the economy based on diesel fuel consumption, is now available.

Last week the Ceridian and the UCLA Anderson School of Management announced that it “will no longer publish the accompanying monthly data interpretation report. In its place, the report will include a headline regarding the overall direction of the PCI in correlation with Industrial Production and a regional summary, all of which should be familiar from previous monthly PCI reports.”

Speaking for myself, I am deeply disappointed with the decision to remove economist Edward Leamer’s commentaries, which I found fascinating and informative.

Here is the commentary-free update for March:

The Ceridian-UCLA Pulse of Commerce Index? (PCI?), issued today by the UCLA Anderson School of Management and Ceridian Corporation rose 0.3 percent in March following the 0.7 percent increase in February and the 1.7 percent decrease in January. The first quarter PCI is below the fourth quarter of last year by 4.9 percent at an annualized rate.

For a closer look at the data with some comparisons of the PCI with real retail sales, industrial production and GDP, see the latest report (PDF format). Mike Shedlock has posted some interesting commentary on the divergence between the PCI and retail sales.

My focus on the PCI is the three month moving average of the index adjusted for population growth over the timeframe of the index. My assumption is that diesel fuel demand is highly correlated with the population dependent on its benefits. But first let’s see the raw data, with and without seasonal adjustment.

The first chart shows the PCI unadjusted and seasonally adjusted. As we can readily observe, the index had been trending up since end of the Great Recession, but it has yet to achieve the highs of the immediate pre-recession months and now appears stalled or slightly contracting. In fact, we’re tracking at approximately the same level as in late 2005.

 

 

In the chart below the 3-month moving average of the PCI is shown with the dotted blue line. The solid line is the same moving average of the data series adjusted for population growth based on the Bureau of Economic Analysis mid-month population data, which is available from the St. Louis Federal Reserve here. The current level of the population-adjusted metric is equivalent to the level first attained in the spring of 2002, a full decade ago.

 

 

The Ceridian Index continues to support a fascinating perspective on various mainstream economic indicators, and of late it has suggested a skeptical view of the growing optimism about the economic recovery.

 

 

 

 

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