A previously private economic indicator that tracks the shipment of goods by truck is hinting at slow growth in the U.S. economy, the University of California-Los Angeles Anderson School of Management reported Wednesday.
The Ceridian-UCLA Pulse of Commerce Index slowed to a 3.3% seasonally adjusted annualized growth rate in the three months ending in January from a 14.6% rate in the three months ending in December. The index was released to the public for the first time Wednesday.
Despite the apparent slump in January, the index was still 2.3% higher than it was a year earlier, marking the first year-over-year gain in 21 months.
"The first look is not happy news," said Ed Leamer, chief economist for the Ceridian-UCLA index and director of the UCLA Anderson Forecast, comparing it with a consensus forecast of 2% to 3% growth this year.
Leamer said that one month doesn't make a trend but added: "Things are going to have to look a lot better in February and March to turn this worry into optimism about the power of the recovery."
In the fourth quarter, the index rose at a 7.3% annual rate.
The Ceridian-UCLA index is based on anonymous data from thousands of trucking companies across the nation that use Ceridian payment cards to purchase fuel. Leamer said past data for the index show a strong correlation between fuel consumption and economic growth.
The Ceridian-UCLA index could be a reliable leading indicator for industrial production data, considered one of the best coincident economic indicators.
While the index was constructed to have a tight fit with gross domestic product and industrial production, the proof of its value will come if it can accurately predict those numbers.
The Ceridian-UCLA index began to drop rapidly in early 2008, presaging an abrupt drop in industrial output that accelerated in August 2008. Similarly, the index turned higher, beginning in March 2009, anticipating the rise in industrial production that began in July.
However, the index did not anticipate the 2001 recession
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