As a follow up to last week’s initial release of the Ceridian-UCLA Pulse of Commerce Index (PCI), I wanted to point out that it was successful in forecasting today’s industrial production (IP) results.Although the underlying index suggested some weakness was encountered between December 2009 and January 2010, the less noisy 3 month moving average correctly predicted that the industrial production series would turn positive on a year-over-year basis in January.
This again suggests that the PCI is an accurate and timely predictor of the Feds industrial production series and likely a whole host of other aggregate macroeconomic data series.
The following chart (click for full-screen dynamic version) shows the PCI and the IP series plotted along with their year-over-year percent changes since 2004.
