(Updates with Celadon CEO comment in ninth paragraph.)
Oct. 12 (Bloomberg) -- U.S. truckers’ fuel purchases dropped the most in the three months through September of any quarter in the past 10 years, excluding recessions, a sign economic growth may be slowing.
The Ceridian-UCLA Pulse of Commerce Index, which measures the volume of driver purchases at fueling stations nationwide, dropped at an annualized rate of 4.3 percent in the three months through Sept. 30. The breadth of truckers’ deliveries makes their fuel purchases an indicator of economic health.
August’s result “was negative enough that it made me worry about this double-dip hypothesis, and now we get another big negative in September, and now a cumulative decline which is really symptomatic of recession,” Ed Leamer, the index’s chief economist, said in a telephone interview.
Still, Leamer said he doesn’t predict a double-dip recession because other economic indicators are mostly positive.
“This thing is sticking its neck out,” he said. “The trucking industry is telling us something that either isn’t going to last or is an extraordinarily prescient result.”
Truckers may be fueling up less because customers are increasingly shipping by a combination of railroad and truck, rather than just over the road, Leamer said.
The index’s drop may also be the result of “fearful retailers worrying about December sales and not wanting to end up with any excess stock, and therefore having lean inventories,” he said.
Trucking Growth Indicators
The measure of fuel purchases clashes with commentary from trucking executives, as well as some other indicators of freight growth.
Cass Freight Shipments, a measure of North American shipments, advanced 7.5 percent from the year earlier in September and the American Trucking Association For-Hire Truck Tonnage Index climbed 5.2 percent in August on a seasonally adjusted basis.
A Bloomberg survey of 66 economists projected, on average, that the U.S. economy expanded 1.8 percent in the third quarter from the previous three-month period.
Gross domestic product grew at a revised 1.3 percent pace in the second quarter, according to the Commerce Department, following a 0.4 percent increase in the first three months of the year.
Carriers’ fuel purchases may have dropped because they’re improving their efficiency, said Steve Russell, chief executive officer of truckload carrier Celadon Group Inc. The cost of diesel fuel has risen 14 percent this year, according to data from the American Automobile Association.
“Every trucking company I know is focused on reducing miles per gallon,” Russell said. “To see there’s a 4 percent reduction in fuel purchases - I bet most of that is really related to the improvement in miles per gallon.”
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