The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), eased 0.2 percent in July on a three-month moving average (3MMA) basis following three months of gains in March-May and weak months in the winter. On a year-over-year (Y/Y) basis, the barometer fell 0.2 percent (3MMA).
The unadjusted measure of the CAB rose 0.2 percent in July and fell 0.4 percent in June. The diffusion index rose to 65 percent in July. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for June was revised downward by 0.39 points and that for May by 0.09 points.
"A pattern of fluctuating barometer readings – months up followed by months down – indicates late-cycle activity," said Kevin Swift, chief economist at ACC. "The CAB reading continues to signal moderate gains in U.S. commercial and industrial activity through late 2019, but rising volatility suggests change may be on the way."I really can't figure out how I feel about a recession in 2020. I don't think there will be one right now (as defined broadly as 2 consecutive quarters of negative GDP growth), but who knows?