Measuring the economy one credit-card swipe at a time

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What does this chart tell us?

That diesel fuel purchases might make a useful economic indicator. UCLA’s Anderson School of Management is teaming up with the payment processor Ceridian to start releasing a monthly index of diesel purchases at some 7,000 Interstate truck stops. The chart above shows that changes in diesel purchases anticipated both the most-recent recession and recovery—which makes perfect sense considering how many economic inputs travel by truck (raw materials, semi-finished goods, consumer products).

It’s not too often that we get such a large data set in real-time. I’m excited! Starting on Feb. 10, anyone with an Internet connection will be able to follow the numbers at http://www.ceridianindex.com. More detailed data—like regional changes—might require a subscription (they’re still working out the details).

So what are fuel purchases telling us now? Let’s check out the chart. You’ll notice that a three-month moving average is used since the data are so volatile.

While we’re still far from the levels of a few years ago, diesel purchases have really been accelerating of late. That indicates a solidly recovering economy. Now, you also could have come to that conclusion from, say, the fourth quarter GDP numbers. Thing is, Q4 GDP came out on Jan. 29. The data in the above chart was available on Jan. 11.

What do we think? A good economic indicator?

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