May 11, 2011
The Ceridian-UCLA Pulse of Commerce Index (PCI), a measure of the economy based on diesel fuel consumption, was released earlier today (PDF file). The index posted its 17th straight month of year-over-year growth, but the see-saw economic performance persists. According to the report:
Though down in April, the decline offset only a fraction of the exceptional 2.7 percent gain posted in March, which was sufficient to drive continued growth in the three month moving average of the PCI.
This reinforces our cautious, below consensus outlook for GDP growth. The disappointing 1.8 percent growth of real GDP in the first quarter was consistent with the pattern of modest, fitful reflected by the PCI since the middle of 2010. The April PCI release is more of the same — a three month moving average that calls for further growth in GDP, but at a modest rate in the 2-3 percent range, not the 5-6 percent range that is necessary to drive meaningful improvement in unemployment. Absent acceleration in PCI, we continue to expect monthly employment gains to remain rangebound between 150,000 and 200,000 new jobs.
In the chart below the PCI as calculated by Ceridian-UCLA is shown with the dotted blue line. The solid line is the same 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.
Interpreting the Data
“See-saw economic performance persists” is the way the April results were characterized in the Ceridian-UCLA report. Indeed, the index has recovered to the pre-recession level of May 2006. However, on a population adjusted basis, the current index level is about where it was in September 2004.