The latest Pulse of Commerce report is out from UCLA Anderson School of Management and Ceridian Corporation, and the study shows that negative results experienced in July were followed by even steeper negative results in August. Q3 GDP results are expected to be flat-to-slightly positive, continuing a pattern that the analysts suggest requires a new catalyst to break the routine.
The study registered a downturn of 0.2% in July, a bad result that looks benign next to the 1.4% drop that was tallied for August.
“July and August results indicate that the PCI will decline in the third quarter suggesting GDP growth of 0.0 to 1.0 percent,” said economist Ed Leamer. “The August number supports the pattern of sluggish economic growth coming out of a recession, which is something that we’ve seen in the past. What we’re experiencing is the ‘new normal,’ where the U.S. economy will continue to stumble forward until a new growth engine is identified. Essentially, the economy is in need of an innovation burst.”
The study is based on diesel fuel consumption, which is considered to be significant because it is tied to the transport and sale of raw material, product components and finished goods.
While the numbers are declining on a serial month-to-month basis, the news is not all bad. The study produces results on a year-to-year basis that have been in positive territory during every month so far this year with the exception of May. However, while July was up 1% YOY, Augusts was up only 0.4%.