As a further indication of anemic economic growth, an index tracking movement of goods on the nation’s highways fell 0.9 percent in May, after falling 0.5 percent in April.
The Ceridian-UCLA Pulse of Commerce Index (PCI), which captures real-time fleet-truck fuel purchases, was flat from a year ago. The index also declined in four of the first five months of 2011 and in eight of the past 12 months.
Craig Manson, senior vice president and Index expert for Minneapolis-based Ceridian, said that, based on the index, second-quarter growth in the gross domestic product would be less than 2 percent, which he said is below consensus forecasts.
GDP growth fell to 1.8 percent in the first quarter. Manson also said that industrial production is likely to show growth of 0.05 percent for May. The index was flat in April.
“We’re not calling for another recession or a double dip,” he said. But they have lowered expectations for GDP growth below 2 percent in the second quarter and 3 percent for the full year. “We’re a lot more tentative on the 3 percent number,” he said.
The report noted that high fuel prices have contributed to the sluggishness.
“I wish it was a better report … It’s pretty clear the recovery stalled out earlier than people thought or we were willing to acknowledge,” he added.
“When things came back to somewhat normal out of gloom and doom, the recovery was from inventory restocking,” but the slack housing market is holding back a full recovery, Manson observed.
“The PCI makes it clear that the high-growth recovery lasted only four quarters from 2009 Q3 to 2010 Q2” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast.
“One small glimmer of good news is that May of last year was the strongest month of 2010, and this month’s result nearly cleared that hurdle,” he said. “Nevertheless, the PCI showed no growth, and this is another indication that the economy is stuck in neutral.”