Driving Recovery Discussion

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The UCLA Anderson Forecast, a well regarded source for economic predictions, is now trying to elbow its way into the crowded world of indexes – with a metric based on smelly diesel fuel.

The forecast, in conjunction with Ceridian Corp. and Charles River Associates, launched a monthly index it believes can become a popular indicator for the health of the U.S. economy.

Already, there are indexes tracking everything from same-store retail sales to bankruptcy filings to housing starts, but UCLA economists hope the Ceridian-UCLA Pulse of Commerce Index can be a standout.

The index uses real-time data – not survey results – of diesel fuel consumption to track the movement of goods across the country. Ceridian, an information services and transportation company, collects data from electronic card payments as thousands of truck drivers fill up their tanks.

The first index, released Feb. 10, showed a 3.3 percent annualized gain for the three months ending in January, indicating truckers were pumping more fuel. But Ed Leamer, director of the Anderson Forecast, said the numbers need to be stronger for a legitimate recovery.

“We’re hoping February and March will be better,” said the economist. “In order to have the kind of bounce-back we are hoping for, where the labor market will improve substantially.”

The Anderson Forecast, established in 1952, earned a name for itself as one of the few sources to predict the severe downturn in the early 1990s and the subsequent rebound.

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