“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 [we are] still far from double-dip territory.” –Edward Leamer, chief economist for the Ceridian-UCLA Pulse of Commerce Index (PCI) tracked by the UCLA Anderson School of Management
The economic picture ain’t looking so good of late (again!!!) according to data tracked by various groups. And while the numbers so far at least don’t indicate a feared “double-dip” recession will occur, they sure ain’t much to cheer about.
Take the Ceridian-UCLA Pulse of Commerce Index (PCI), for example. This particular metric is based on real-time diesel fuel consumption data by over the road truckers. By tracking the volume and location of fuel being purchase – data compiled by fuel card provider Ceridian – the PCI thus monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers, creating a “snapshot” of how the economy is doing.
And that “snapshot” isn’t looking good at the moment. The PCI fell 1% in August, after increasing 1.7% in July following June's drop of 1.9%. Edward Leamer with the UCLA Anderson School of Management and who serves as the PCI’s chief economist said this data is indicative of an economy that is struggling to move forward.
While the boost in the July PCI showed a U.S. economy in slow recovery, he previously said August and September must deliver exceptional results if strong, third quarter growth in the U.S. gross domestic product (GDP) number would be in the cards. The August figure falls short of meeting that requirement, Leamer noted.
"The August data is obviously discouraging after the cautious optimism created from July's report," he noted. That means the 1.9% drop in the August PCI indicates third quarter GDP growth in the range of 1.5% to 2.5% – significantly under the 5% to 6% GDP growth rate required to put people back to work.
Year-over-year August PCI growth of 6% represents the ninth straight month of growth, Leamer added, but the figure has been steadily dropping since June. PCI results need to reach 10% to 15% percent year-over-year growth for a healthy job market, he said.
“The restocking of inventory and exceptional growth in imports that were helping drive the transportation of goods and materials appears to be over,” added Craig Manson, senior VP at Ceridian. “We have seen August economic results from the manufacturing sector continuing their positive momentum, but it's too difficult to interpret, at this point, what it means for trucking.”
Other economic metrics aren’t much brighter, either. According to data tracked by Consumer Reports, published by the nonprofit group Consumers Union, the U.S. job outlook remains bleak, with the group’s Employment Index marking a two-month decline, down in September to 49.1 from 50.2 in August.
The share of Americans claiming to have started a new job in the past 30 days is 5%, according to Consumer Reports’ index, versus 5.9% in August, and down from July's recent high of 7.8%. Job losses in the past 30 days were up, 6.9%, from August, 5.6%. Results show that younger Americans between the ages of 18-34 years have been hit the hardest by job losses (13.7%), the group said.
Americans are also continuing to pull their purse strings tight, as the Consumer Reports Retail Index for August showed continued decline. The Past 30-Day Retail Index for September is at 9.8, down significantly from 11.4 in August, marking an overall decline from a year ago when the Past 30-Day Retail Index was at 11.0. It’s now at its lowest level since November 2009 (when it reached 9.0).
“The recovery faces serious challenges and is at risk of stalling,” said Ed Farrell, a director of the Consumer Reports’ national research center. “Job creation remains the greatest challenge. The growth in the ranks of the employed remains anemic and will dampen consumer outlook moving forward. Americans have not seen any real improvement in their financial situation since the recession hit and this is reflected in our Sentiment Index, which has been in negative territory for the last two years.”
Not a great to tale to tell, economically speaking – at least not right now. Let’s hope a better story develops as we approach the fall and winter holiday season.