With the release of April's figures, the Ceridian-UCLA Pulse of Commerce Index, or PCI, by the UCLA Anderson School of Management is showing flat, overall performance during the first four months of 2010.
The PCI in April fell 0.3 percent, suggesting the economic recovery may have stalled, although an uptick in consumer spending could continue to drive a slow but steady recovery.
Year-over-year growth of 6.5 percent in the PCI marks the fifth straight month of steady increase at "better than normal" levels. However, year-over-year growth of 10 to 15 percent in the PCI is required to drive down the unemployment rate.
While the economy continues to climb year-over-year, the PCI indicates that expectations in the market for a robust recovery may be too optimistic.
The PCI closely tracks the Federal Reserve's monthly Industrial Production index, and with each PCI release comes a lowering of expectations for Industrial Production growth.
The PCI now indicates Industrial Production to grow by 0.4 percent in April when the Federal Reserve releases its report on May 14. Last month, the PCI suggested an April growth rate of 0.6 percent, and in March, PCI anticipated an April increase of 0.85 percent.
"The latest PCI numbers are disappointing and cast considerable doubt on the strength of the recovery and the strength of GDP numbers for 2010," said Ed Leamer, the PCI's chief economist.
"The next two months will tell if the first quarter's healthy consumer spending will help lift the PCI and propel stronger GDP growth for the year."
The PCI is based on an analysis of real-time diesel-fuel consumption data from over the road trucking tracked by Ceridian, a global provider of electronic and stored value-card payment services and human-resources solutions.
The Ceridian-UCLA Pulse of Commerce Index also provides data for the nine Census regions. Five of the nine regions were weak in April, explaining the overall PCI decline of 0.3 percent. Heavy trucking areas such as the East North Central region (Ohio and Michigan) fell 1.7 percent, the South Atlantic region (Virginia and the Carolinas) declined 1.1 percent and the East South Central was down 0.4 percent. The significant West South Central region experienced zero growth in April.
The index is built by analyzing Ceridian's electronic card payment data that captures the location and volume of diesel fuel being purchased by over the road trucking operations, providing a detailed picture of the movement of products across the United States.
"What we are seeing with the PCI and hearing from our customers is that the economy is better than last year, but not great," said Craig Manson, senior vice president and index expert for Ceridian.
"The economy appears to be in recovery, but the big question is by how much? The next two months will tell us a lot about the rest of the year."
The Ceridian-UCLA Pulse of Commerce Index results for May will be released June 10.