May 2011 Diesel Use Suggests Economy Was Slowing (or Not)

The May Ceridian-UCLA Pulse of Commerce Index result reinforces our long-held cautious outlook for below consensus growth in GDP, and suggests that GDP growth will be less than 2 percent for the second quarter. Y-o-Y data suggests the economy was stronger than the Ceridian-UCLA interpretation.

Diesel Usage Less Good – Is the Economy Slipping?

Diesel use in the USA was less good year-over-year (YoY) in April 2011. As the majority of goods are moved using diesel – diesel usage is one of the metrics Econintersect uses to gauge the economy.

Due to government data combining fuel oil with their statistics, Econintersect uses the unadjusted data provided by Ceridian-UCLA Pulse of Commerce Index™ (PCI). The index is based on real-time fuel consumption data for over the road trucking collected by Ceridian.

The YoY improvement was a small 1.28%. This is the lowest YoY increase since 2009. Definitely, the YoY growth of diesel for trucking is trending less good, i.e. the growth in diesel usage is slowing (decelerating). The first derivative (velocity) is still positive. The second derivative (acceleration) is negative.