This index has been a bit erratic in my opinion through 2010 (meaning its results have correlated as well with real economic activity as I would like) . Because of that I use it as a complimentary data point, not a determining one. I still find rail traffic from BNI, CSX, NSC, KSU & UNP to be a far better indicator.
MINNEAPOLIS, Minn. & LOS ANGELES, Calif., January 11, 2011 – The Ceridian-UCLA Pulse of Commerce Index™ (PCI), a real-time measure of the flow of goods to U.S. factories, retailers and consumers, surged 2.4 percent in December and pushed the PCI above its previous 2010 peak established in May. This performance, combined with November’s 0.4 percent increase, was enough to offset three previous consecutive months of decline.
“The latest PCI data further evidences the positive economic sentiment felt since the start of the New Year,” explained Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. “However, we have not entirely escaped the summer doldrums as the three-month moving average is still below its July 2010 level.”
On a year-over-year basis, the PCI increased 4.1 percent in December, in line with the November and October year-over-year comparisons. Importantly, growth in December comes on top of a very strong year-ago performance whereas the previous eleven months of year-over-year growth in 2010 were up against relatively weak prior year comparisons. It should be noted, however, that the 4.1 percent growth figure is only slightly higher than the 3 percent growth characteristic of a normal economy.
Early indications also show that December retail sales performance played out as stated in the PCI’s November announcement: “The holiday sales season will likely be better than last year, but potentially disappointing versus current expectations in the marketplace.” Much of the December PCI increase is attributable to the fact that the week between Christmas and New Years was stronger than usual. Even though December overall was three percent below the previous December peak month in 2007, diesel fuel purchases in the inter-holiday week exceeded 2007 levels.