by Bill McBride on 6/23/2015 02:20:00 PM
Tuesday, June 23, 2015
Here is a relatively new indicator that I'm following that appears to be a leading indicator for industrial production.
From the American Chemistry Council: Leading Economic Indicator Heats Up
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), increased by 0.7 percent in June, followed by a similar gain in May, and an upwardly revised 0.5 percent gain in April. The pattern represents an acceleration of productivity not seen since the first quarter of 2011. Data is measured on a measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB remains up 3.7 percent over this time last year, also an acceleration of annual growth as compared to the first half of 2015. ...Click on graph for larger image.
Applying the CAB back to 1919, it has been shown to provide a lead of two to 14 months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research.
This graph shows the year-over-year change in the 3-month moving average for the Chemical Activity Barometer compared to Industrial Production. It does appear that CAB (red) generally leads Industrial Production (blue).
And this suggests some pickup in growth for industrial production.
Posted by Bill McBride on 6/23/2015 02:20:00 PM