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CERIDIAN’S PCI INDEX: WEAK ECONOMY, BUT NO DOUBLE DIP

14 September 2010 by Cullen Roche 4 Comments

Ceridian’s Pulse of Commerce Index is still showing weakness, however, not signs of a double dip (via Ceridian):

MINNEAPOLIS, Minn., September 14, 2010 – The Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management fell 1 percent in August, a disappointing number that closes out an erratic summer in the PCI. The decline indicates an economy that is struggling to move forward, following July’s increase of 1.7 percent and June’s drop of 1.9 percent.

While the boost in the July PCI showed a U.S. economy in slow recovery, index experts warned last month that August and September must deliver exceptional results to support a strong, third quarter GDP number. The August figure falls short of meeting that requirement.

“The August data is obviously discouraging after the cautious optimism created from July’s report,” said Ed Leamer, chief PCI economist. “There is not much to feel good about with the August data in terms of the unemployment picture, but there is a silver lining in that the August PCI is still far from double-dip territory.”

The August PCI is consistent with a predicted third quarter GDP growth number in the range of 1.5 to 2.5 percent, which is the current consensus view of the economy. The low GDP percentage range is significantly under the 5 to 6 percent rate required to put people back to work.

Source: Ceridian

Cullen Roche

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Comments
  • Anonymous

    I have never seen this index before, so I certainly don’t know what goes into it or anything like that, but given that it hit its high after the recession had already started, I am not going to pay too much attention to it as a leading indicator.

    09/14/2010 at 5:42 PM
    • Nico

      First time for me to see this too, but remember that the beginning of a recession is always plotted in hindsight, several months later as people look in retrospect where it started. Some economists say that we are already into the double dip and we will look back a year from to Q3-2010 as the month it started… who knows.

      09/14/2010 at 7:29 PM
  • Pod

    a close relative works for Ceridian, and i own a small chunk of it via an investment i have in a private equity fund. my point is that i hear about the company from my relative, and I see the financial statements via my Private equity investment.
    All I can say is that I would not place much weight on anything that comes from ceridian.

    09/14/2010 at 9:34 PM