WASHINGTON (June 25, 2019) – The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was flat (0.0 percent change) in June on a three-month moving average (3MMA) basis, following three monthly gains. On a year-over-year (Y/Y) basis, the barometer is up 0.3 percent (3MMA).
The unadjusted measure of the CAB retreated 0.2 percent in June and fell 0.3 percent in May.
The diffusion index rose to 65 percent in June. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for May was revised downward by 0.38 points and that for April by 0.22 points.
“The slowing economy and rising trade tensions have weighed on business confidence and investment, resulting in mixed manufacturing activity,” said Kevin Swift, chief economist at ACC. “In summary, the CAB reading continues to signal gains in U.S. commercial and industrial activity through late 2019, but at a moderated pace.”
The CAB has four main components, each consisting of a variety of indicators: 1) production; 2) equity prices; 3) product prices; and 4) inventories and other indicators...This isn't the greatest news, and of a piece with recent economic news that led the Fed to signal that it will be cutting rates soon.
A couple of crazy questions from a milquetoast economic doomsayer:
- 2019 is turning out to be a seemingly decent economic year, as measured by GDP. Does anyone expect 2020 to carry this along?
- When will the next recession be? I got a dollar that the next recession (casually) two consecutive quarters of negative GDP growth) will happen in the next 2 years.
- What is the American Chemical Society doing to prepare its members for that next recession?
(For those students/postdocs who will be forwarded this post, in general, I'm pessimistic on the economy. Watch the trends, not the data points.)