U.S. economists and markets are almost hard-wired to respond in knee-jerk fashion to the latest numbers issuing forth from the U.S. Commerce Dept., the Bureau of Labor Statistics, and other government agencies, as well as established industry organizations such as the Institute for Supply Management. By recent measures, the U.S. economy isn’t rebounding as quickly as some had hoped. But there’s a wealth of lesser-known metrics that offer a more nuanced view of the economy — and in some cases, these hidden indicators reflect greater confidence that the recovery is on track and sustainable in the long run.
One of the more intriguing shadow metrics is the Pulse of Commerce Index, or PCI, a joint project of Ceridian Corp., a consumer services outfit, and the Anderson School of Management at the University of California at Los Angeles. The index climbed 3.1 percent in May from April, the largest monthly increase since February 1999. The PCI uses a very specific industrial measure to represent the overall strength of the broader U.S. economy: diesel fuel sales at roughly 7,000 truck stops across the country. If you think of the interstate highways crisscrossing the country as the arteries of the U.S. manufacturing economy, “the goods flowing in those arteries are the lifeblood of the system,” says Ed Leamer, chief economist for the Ceridian-UCLA PCI. “This is the supply chain in operation.”
And unlike lagging government data, the PCI reflects real-time info recorded instantaneously by sensors at each of those 7,000 truck stops. The pop in the May PCI calls for a big boost in industrial production, and given the historic relationship between the PCI and real growth in gross domestic product, the May PCI implies GDP will grow 3 percent to 5 percent in the second quarter, ahead of the normal 3 percent pace, according…