The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), eased 0.3% in June on a three-month moving average basis following a 4.6% decline in May. On a year-over-year basis, the barometer fell 12.0% in June.
The un-adjusted data show a 3.5% gain in June following a 2.2% gain in May and a 6.3% decline in April. The diffusion index rose from 35% to 53%. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for May was revised upward by 2.68 points and the April reading was revised upward by 0.05 points.
“While the latest CAB reading is consistent with a recession, two consecutive months of gains in the un-adjusted data is a positive development,” said Kevin Swift, Chief Economist at ACC. “We’ll want to see at least another month of gains in order to conclude that the economy has turned a corner.”
The CAB has four main components, each consisting of a variety of indicators:
2) equity prices;
3) product prices; and
4) inventories and other indicators.
Production-related indicators were slightly positive in June. Plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry rebounded and U.S. exports were weak. Equity prices were mixed and product and input prices are firming. Inventory and other supply chain indicators were mixed.
For the full data set, visit americanchemistry.com/CAB-vs-Industrial-Production/.
Source: American Chemistry Council