The latest Ceridian-UCLA Pulse of Commerce Index(PCI), a measure of the economy based on diesel fuel consumption, is now available. The published report highlights the 1.0% decline in September with the subtitle “This is alarming news for the third quarter and beyond.” Here is an excerpt from the report followed by a pair of charts to illustrate the behaviour of this indicator, the second of which adjusts for population growth.
The Ceridian-UCLA Pulse of Commerce Index (PCI), issued today by the UCLA Anderson School of Management and Ceridian Corporation fell 1.0 per cent in September on a seasonally and workday adjusted basis, following a 1.4 per cent decline in August and a 0.2 per cent decline in July.
In the last three months, the PCI has declined at an annualized rate of 10 per cent per year as illustrated in the figure above. This rate of decline has been exceeded only in the deep recession of 2008/09, and equaled only once outside of a recession in March 2000. In other words, since June, trucking activity has been receding at a pace that would be expected to show up in other economic measures soon. Two or three more months like this would confirm an official recession (PDF full report)
The first chart shows the PCI index 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. In fact, we’re tracking at approximately the same range as November 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 Reservehere.
Interpreting the Data
“Alarming news for the third quarter and beyond” is a major theme in the latest Ceridian-UCLA report, a theme that echoes, with less dramatic certainty, the latest recession call of the ECRI. The workday and seasonally adjusted three-month moving average of the index is in fact stalled at the pre-recession level of November 2005. However, on a population adjusted basis, the current index level is about where it was in February 2004.