The Ceridian-UCLA Pulse of Commerce Index issued Wednesday, Nov. 9, rose 1.1 percent in October after three consecutive months of negative numbers. Over the past three months, compared to the prior three months, the PCI declined at an annualized rate of 5.8 percent, and the PCI remains lower than it was during most of the first half of 2011.
“The October data offer some welcome relief from the double-dip fears that were rampant a month ago, but one month does not mean a new trend,” says Ed Leamer, chief economist for the index and director of the UCLA Anderson Forecast. “Until we get a series of positive months, it remains a ‘she-loves-me, she-loves-me-not’ economy with bad news followed by good followed by bad.”
The index is based on real-time diesel fuel consumption data for over-the-road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. On a year-over-year basis, the PCI was up 1.3 percent in October compared to the -0.2 percent decrease in the prior month. This contrasts with the trend over the prior four months where the year-over-year change in the PCI was declining rapidly.
“Given the weak PCI, the advance estimate of third-quarter GDP growth of 2.5 percent was surprising, but the final estimate may be lower,” says Leamer. “The PCI measures inventories in motion, and it is noteworthy that the inventory component of GDP contributed minus 1.1 percent to the overall 2.5 percent growth rate.”