The latest release of the Ceridian-UCLA Pulse of Commerce Index™ (PCI) suggests that the economic activity increased in March with the seasonally adjusted index increasing 1.02% as compared to February and 5.99% on year-over-year basis.
Further, the three month moving average registered another year-over-year increase indicating that the March Industrial Production data (released next week) will likely show a similar annual gain.
As cited in the release, the PCI is closely correlated to the industrial production series but given the broad nature of the series it’s not surprising to see that it correlates well with other macro data.
Looking at the chart below (click for full-screen dynamic version) you can see that while a pretty reasonable correlation exists between the PCI and the S&P/Case-Shiller Composite-10 Home Price Index (CSI), the CSI reached its peak roughly a year before the PCI.
Could the latest easing of home prices foretell a general slowing trend in the economy?