Mike Shedlock

The UCLA Ceridian Pulse of Commerce Index based on real-time truck fuel usage rose slightly in March.

The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued today by the UCLA Anderson School of Management and Ceridian Corporation rose 0.3 percent in March following the 0.7 percent increase in February and the 1.7 percent decrease in January. The first quarter PCI is below the fourth quarter of last year by 4.9 percent at an annualized rate.

Sampling of Graphs From the Report



click on any chart for sharper image

I would like to see a comparison of the current three months vs. the same three months a year ago, excluding seasonal adjustments. Workday adjustments are reasonable but should be negligible over a three month period.

Such a comparison is how I show overall petroleum and gasoline usage. Please see Another Plunge in 3-Month Rolling Average of Petroleum and Gasoline Usage for details.

I will have an update through March out soon.

GDP vs. PCI



Year-Over-Year Growth of PCI



PCI Compared with Real Retail Sales



What accounts for these divergences?

  • Government spending
  • Online sales
  • Rebound in auto sales and high-end merchandise
  • Extreme weakness in housing 
  • Renewed plunge in Savings Rate


Personal Savings Rate



Encouraged by the Fed, Consumers are once again spending too much.

The picture is not sustainable. The US economy will not disconnect from the rest of the world regardless of what most mainstream media reports.

Eurozone Composite PMI® Signals Recession Says Markit; France in Renewed Decline, German Growth Weakens, Italy and Spain Contract Further

In what should have been expected, but somehow wasn't, Eurozone weakness is across the board except for Ireland bucking the trend for now.

Markit says Eurozone Composite PMI® Signals New Recession in Eurozone

Key Points for March

  • Final Eurozone Composite Output Index: 49.1 (Flash 48.7, February 49.3)
  • Final Eurozone Services Business Activity Index: 49.2 (Flash 48.7, February 48.8)
  • France sees renewed decline, German growth





Latest PMI data provided further evidence of a mild contraction of the Eurozone private sector economy during March. The latest decline also meant that output fell over the first quarter as a whole, raising the likelihood that the economy has fallen back into technical recession.

Composite PMI Output Index by Nation



High oil prices led to a further marked increase in average input costs in March, with the impact felt at both manufacturers and service providers. Input cost inflation was the fastest for nine months, but remained below the near-record high reached one year ago. Input price inflation accelerated in Germany, Spain and Ireland, but eased in France and Italy. Italy nonetheless still saw the steepest overall increase.

Inflows of new orders fell for the eighth month running, dropping at the fastest pace so far this year. New business fell across the big-four nations, with particularly steep falls seen in Spain and Italy.

Weak demand also held down output prices, with March data signalling little change over the month.

Comment:
Chris Williamson, Chief Economist at Markit said:

“A slight easing in the rate of decline of the Eurozone service sector was insufficient to offset the first decline in manufacturing output for three months, causing the overall economy to contract again in March.

“With the exception of a marginal expansion seen in January, the economy has been in continual decline since last September. Although the average rate of decline seen over the first quarter eased compared with the final three months of last year, the survey data nevertheless indicate that the region has slipped back into a technical recession.

“The downturn is currently only very mild, however, with gross domestic product probably falling by just 0.2% in the first quarter. Furthermore, with business confidence in the service sector running at a far higher level than late last year, the recession may also be brief.”

I have been critical of Market analysis for months and this is the worst yet.

First they said Germany would prevent a recession, then Germany would decouple, now they suggest this is only a "technical" recession and  the "the recession may be mild and brief".

The European recession will be neither mild nor brief. Spain, Portugal, and Greece are in economic depressions with no end in sight. Spain and Italy (the 3rd and 4th largest eurozone markets) are poised for steeper slides. Germany will not be immune to this as I have stated for months on end.

German manufacturing contracted in March and services sector will soon follow. For some reason, Markit economists cannot figure this out.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.