NEW YORK Feb 10 A new index using truck stop fuel purchases to gauge future U.S. economic activity slumped in January but its three-month moving average showed growth, suggesting the economy is still on the road to recovery.
The Ceridian-UCLA Pulse of Commerce Index (PCI) produced by UCLA Anderson School of Management fell 36.8 percent in January from the previous year, after a strong increase in December.
The index's three month moving average is up 3.3 percent thanks to the big gain in December, suggesting economic recovery is proceeding slowly, according to the survey published on Wednesday.
The PCI is now up 3.6 percent compared to one year ago, marking its first year-on-year increase since April 2008.
The index tracks the volume and location of diesel fuel being purchased around the United States. It anticipates shifts in economic growth as it shows when and where increases and decreases in shipments of raw materials and goods are taking place, said Edward Leamer, the index's chief economist.
"The interstates that crisscross the country are the arteries of the system, and the product flowing in the trucks are the life blood," Leamer said. "If you don't move that product the economy comes to a grinding halt."
The index is produced in conjunction with Ceridian, a business services company that processes credit card payments.
The company's credit card is used by 25,000 trucking companies in the United States. Data from card transactions is used to determine where fuel purchases are taking place.
"The weak January value supports the doubters who are looking for GDP growth rates in 2010 much lower than the 5.7 percent we just experienced," said Leamer.
Leamer said the index aims to have predictive power for other economic indicators, particularly the Federal Reserve's monthly figures on industrial production.
Using Ceridian's ability to track fuel purchases, the report has tracked the number of gallons delivered through the nation's 7,000 truck stops along U.S. interstates since 1999.
(New York Ratings Team; Editing by Andrew Hay)