The Ceridian-UCLA Pulse of Commerce Index (PCI), issued today by the UCLA Anderson School of Management and Ceridian Corporation fell 1.4 percent in August on a seasonally and workday adjusted basis, following a 0.2 percent decline in July.

"July and August results indicate that the PCI will decline in the third quarter suggesting GDP growth of 0.0 to 1.0 percent," saidEd Leamer, chief economist for the Ceridian-UCLA Pulse of Commerce Index and director of the UCLA Anderson Forecast. "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 PCI continues to prove its value in providing insight into the U.S. economy. While previously being flat, recent, seven-day-average diesel volumes have dropped by 2 percent fromJuly 23 to August 19, excluding the holiday impact. However, the last week of August suggests some improvement."

On a year-over-year basis, the PCI was up 0.4 percent in August. While the YOY growth trend continues – the PCI has grown on a YOY basis every month sinceJanuary 2010except forMay 2011– this is down from the 1.0 percent YOY increase in July. Over the past four months, the YOY increase of the PCI has fallen below 1.0 percent compared to 3.0+ percent in the first four months of the year, further indicating the weakness in the economy.

The weakness in the PCI over the last several months called for a zero percent change in the July Industrial Production – the initial release of 0.9% was stronger, although subject to revisions. Due to the continued weakness evident in the PCI, the forecast for August Industrial Production is a 0.26 percent decline when released onSeptember 15.