An economic index based on real-time diesel fuel consumption data fell 1% in August 2010 while Econintersect’s analysis of the unadjusted noisy data believes the index was unchanged.
According to Ceridian-UCLA:
The Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management fell 1 percent in August, a disappointing number that closes out an erratic summer in the PCI. The decline indicates an economy that is struggling to move forward, following July’s increase of 1.7 percent and June’s drop of 1.9 percent.
While the boost in the July PCI showed a U.S. economy in slow recovery, index experts warned last month that August and September must deliver exceptional results to support a strong, third quarter GDP number. The August figure falls short of meeting that requirement.
“The August data is obviously discouraging after the cautious optimism created from July’s report,” said Ed Leamer, chief PCI economist. “There is not much to feel good about with the August data in terms of the unemployment picture, but there is a silver lining in that the August PCI is still far from double-dip territory.”
The August PCI is consistent with a predicted third quarter GDP growth number in the range of 1.5 to 2.5 percent, which is the current consensus view of the economy. The low GDP percentage range is significantly under the 5 to 6 percent rate required to put people back to work.
Year-over-year August PCI growth of 6 percent represents the ninth straight month of growth, but the figure has been steadily dropping since June. PCI results need to reach 10 to 15 percent year-over-year growth for a healthy job market.
“The restocking of inventory and exceptional growth in imports that were helping drive the transportation of goods and materials appears to be over,” said Craig Manson, senior vice president and index expert for Ceridian. “We have seen August economic results from the manufacturing sector continuing their positive momentum, but it’s too difficult to interpret, at this point, what it means for trucking.”
Our analysis shows the data is too noisy for an exact determination of MoM gain or loss. However, the data does not seem to have an up or down bias. This data is consistent with a slow growth economic hypothesis.