January Ceridian-Pulse of Commerce Index Down But Don't Worry, We Think February Will Be Much Better

 

The latest Ceridian-UCLA Pulse of Commerce Index^TM is out and the January numbers are not good, showing a drop of 1.7% when compared to December -- and this in the face of some pretty good economic numbers coming from other indicators. Alas, don't worry, Ed Leamer, the chief economist for the Ceridian Index and director of the UCLA Anderson forecast explains why:

"The Ceridian-UCLA Pulse of Commerce Index^TM was down 1.7% from December to January on a month-over-month basis. On a year-over-year basis we're down 2.2%. Both of these number are extremely disappointing, signaling very, very moribund trucking -- and that's in the fact of quite a few other indicators that suggest the economy is turning around, most notably the labor market.

"Everything that we're getting about the labor market is suggesting 2012 is going to be a much better year than 2011. And it's not just the labor market. It's also real retail sales (and) industrial production.

"What's happening with trucking? Why is our measure of trucking so weak? There are several hypothesis.

 "One possibility is that our index is mis-measuring in some way. It could be that Ceridian is losing customers and therefore not picking up as many diesel fuel volumes of sales that we had historically. That doesn't seem to be the fact. Fuel efficiency is obviously another possibility, particularly since we had that spike in diesel fuel prices a couple of years ago and firms are doing their capital investments t improve fuel efficiency to get trucks moving from Point A to Point B with less fuel. That probably had an impact -- a significant impact -- on the year-over-year number turning that -2.2 into possibly a 0 or maybe even a positive number if you control for fuel efficiency. But that can't matter very much on a January to December basis. 

"So, the other hypothesis which we continue to maintain, is that trucking is delayed and that we're going to see a surge in trucking in March and April and February. So, tune in next month, we think February is going to be a lot better than January."

Ceridian-UCLA Pulse of Commerce Index^TM

UCLA Anderson Forecast