Wednesday, November 27, 2019

Chemical Activity Barometer is stable in November

Well, this is better than a kick in the shins:
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was stable (0.0 percent change) in November on a three-month moving average (3MMA) basis following a 0.3 percent decline in October. On a year-over-year (Y/Y) basis, the barometer was off 0.2 percent (3MMA). 
The unadjusted data showed a solid 0.6 percent gain and was driven by increases among all four components. The diffusion index rose to 59 percent in November. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for October was revised upward by 0.16 points and that for September by 0.18 points. 
"The CAB signals slow gains in U.S. commerce into mid-year 2020," said Kevin Swift, chief economist at ACC. 
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.
It's hard to make a judgment based off a single indicator, but in this case, I think that "no news is good news" and that our expectations about an economic downturn in 2020 do not seem to have much data to bolster them. That said, dreams of massive chemical industry employment increase don't have much backing either. 

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