The Ceridian-UCLA Pulse of Commerce Index released Tuesday, Dec. 13, rose 0.1 percent in November following a 1.1 percent increase in October. Over the past three months compared to the prior three months, the PCI – based on real-time diesel fuel consumption data for over-the-road trucking – declined at an annualized rate of 4.8 percent. On a year-over-year basis, the PCI grew 0.9 percent in November compared to the 1.3 percent year-over-year increase in October.
“The continuing weakness in the PCI is out of sync with real retail sales,” said Ed Leamer, chief economist for the index and director of the UCLA Anderson Forecast. “The year-over-year increase in real retail sales through October was 3.6 percent compared with an increase in the PCI of 1.3 percent.” Leamer said the disconnect between real retail sales and the PCI suggests that retailers have learned to better manage their inventory. “Shoppers can anticipate fewer bargains in the month ahead and relatively little stock left for the after-Christmas sales.”
Given the weak PCI, the advance estimate of third-quarter GDP growth of 2.5 percent was surprising, but the final estimate was lower, said Leamer. The inventory contribution to third-quarter GDP was revised downward to minus 1.55 percent, which accounted for most of the revision of GDP growth to 2.0 percent, he said, and with two months of data available, the PCI suggests fourth-quarter GDP growth in range of 0.0 to 1.0 percent.