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What's driving the economy, literally

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A gasoline tanker truck drives near the Chevron refinery in Richmond, Calif., this year. Diesel fuel sales have been declining in recent months.

 

An unusual index of economic activity — diesel fuel sales — is offering further proof that the economy is stumbling along without offering much hope for improvement.

The Ceridian-UCLA Pulse of Commerce Index tracks diesel fuel purchased at 7,000 truck stops across the country to gauge how much stuff is being transported around the country for purchase or use in factories, construction and the like.

The index, which had been steadily rising since the end of the 2007-09 recession, fell in July and more sharply in August, reflecting the economy's fresh weakness.

The index offers some insight into retail sales, which are key to the country’s economic health. A weak August reading, for example, could mean that back-to-school sales were disappointing, according to the latest report.

It’s a sluggish pattern that Edward Leamer, the economist who oversees the index, also saw in the aftermath of the nation’s last recession.

Leamer doesn't see the reading as proof of a new recession, yet.

“That doesn’t mean it’s party time because there’s nothing on the positive side, either,” Leamer said. “There’s no locomotive.”

The economy has been hamstrung by a high unemployment rate and continued housing market woes. That’s raising fears that the economy will slip back into a period of contraction, resulting in a double-dip recession.