The Ceridian-UCLA Pulse of Commerce Index (PCI), issued by the UCLA Anderson School of Management and Ceridian Corporation, fell 0.5 percent on a seasonally and workday adjusted basis in April, marking a continuation of the see-saw economic performance experienced over the past 12 months.
"Though down in April, the decline offset only a fraction of the exceptional 2.7-percent gain posted in March, which was sufficient to drive continued growth in the three month moving average of the PCI," said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. "However, the disappointing 1.8-percent growth of real GDP in the first quarter remained consistent with the pattern of modest, fitful economic growth reflected by the PCI since the first quarter of 2010. The most recent report reinforces our long held cautious, below consensus outlook for growth in GDP and employment."
"Until we see acceleration in the PCI, we expect monthly employment gains to remain range-bound between 150,000 and 200,000 new jobs," Leamer continued. "For the second quarter, the PCI suggests GDP growth in the 2-percent to 3-percent range, not the 5-percent to 6-percent range necessary to drive meaningful reductions in unemployment."
Year-over-year growth in April was again positive, up 3.5 percent. This was the 17th straight month of year-over-year improvement in the Index and a clear indication that the economic recovery continues. From an absolute standpoint, GDP remains ahead of the previous peak reached in Q4 07. But the PCI and industrial production are still about 5 percent below their previous peaks - meaning that the goods producing component of GDP is still well below its previous high.
"Over time, the PCI has shown a substantial correlation with industrial production," explained Craig Manson, senior vice president and Index expert for Ceridian. "In fact, the PCI forecast of 0.8-percent growth in industrial production for March matched the estimate subsequently released by the Federal Reserve. This was the second straight month that the PCI matched the subsequent government estimate. Based on the relatively weak April result, the PCI is calling for growth of 0.25 percent in industrial production when the government reports its number on May 17." The PCI is not only closely correlated with industrial production, it has also shown a remarkable correlation with retail sales over the past 10 years. This month, we have broadened the scope of the Index report to include a discussion of that relationship.
The complete April report, regional analysis and additional commentary are available at www.ceridianindex.com or by contacting index@ceridian.com. The site offers further detail such as Index graphs and downloadable data, video commentary and sound bites, information on how the data is obtained, and the opportunity to receive updates on the latest information via e-mail and RSS feeds.
