An index that gauges economic activity, which is done monthly, by tracking truck driver's fuel purchases plummeted in October, marking the third consecutive monthly drop and giving a sign to a possible weakness for the holiday buying season.
The Ceridian-UCLA Pulse of Commerce Index (PCI) evaluates data from fuel credit cards swiped by drivers as they fill up their trucks. The Ceridian-created database aquires and evaluates the location and volume of fuel being purchased. Since the data is tracked in real time, UCLA and Ceridian states, the index paints a precise picture of product flow across the nation and by extension, overall economic activity. The Ceridian-UCLA PCI is published by the university's Anderson School of Management.
After a 0.5 percent plunge in September and a 1.0 percent drop in August, the index plummeted 0.6 percent this October. Since the depression of the recession in the winter of 2009, this is the first time the index has dropped for three consecutive months.
The October drop, coming in what is basically a good month for U.S. trucking, anticipates trouble for holiday shopping activity as cautious retailers tune down on orders, the report's authors revealed.
A senior vice president for Ceridian, Craig Manson, elucidated that the October results, no matter how disheartening, still show the 11th straight month of year-over-year increase in the index. Manson said in a statement. "This means that the holiday sales season will likely be better than last year, but potentially disappointing versus current expectations in the marketplace."
With the beat, on the other hand, a survey of chief marketing officers at dominating U.S. retailers by accounting and consulting firm BDO revealed they assume overall holiday sales to escalate 3.50 percent this year, up from a 2.68 percent increase in 2009.
The respondents said they have jacked-up their inventory purchases by 2.8 percent leading into the holidays, with more than one-third declaring their inventory purchases have "measurably increased" since last year.