by Calculated Risk on 2/20/2018 11:17:00 AM
Tuesday, February 20, 2018
Note: This appears to be a leading indicator for industrial production.
From the American Chemistry Council: Industrial Activity Signals Further Gains in U.S. Economy
he Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), expanded 0.5 percent in February on a three-month moving average (3MMA) basis, its fifth such solid gain following the 2017 hurricanes. On an unadjusted basis, growth was just 0.1 percent. The CAB is up 4.2 percent on a 3MMA compared to a year earlier.Click on graph for larger image.
Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.
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).
The year-over-year increase in the CAB has been solid over the last year, suggesting further gains in industrial production in 2018.
Posted by Calculated Risk on 2/20/2018 11:17:00 AM