Volume 2, Issue 9 – May 15th, 2014
The American Chemistry Council’s Chemical Activity Barometer, which is seen as a leading economic indicator, has reached its highest peak since March 2008.
ACC noted that the unusually harsh winter skewed earlier data. It reported that April’s barometer reflects upward revisions for January, February, and March of 0.1, 0.2, and 0.1 points, respectively.
On a three-month moving average basis, the April CAB reading showed a healthy 0.5% gain over March, which registered a 0.3% increase that was blamed on the extreme winter weather experienced throughout most of the country.
Together with the upward revisions, this suggests further growth momentum in the broader economy in the months ahead, ACC said.
“After an economic deep freeze over the past several months, it looks like the U.S. economy is finally starting to bloom,” said Dr. Kevin Swift, chief economist at ACC.
“Economists around the country are coalescing around the idea that the fundamentals of our economy may be healthier than previously believed,” Swift added. “This is something that the CAB has been suggesting for quite some time.”
Recent Federal Reserve Board data showed U.S. manufacturing output rose for the second consecutive month, and that industrial production was up 0.7%, besting many analysts expectations.
Tracking closely with the CAB, Federal Reserve data also revealed capacity utilization to be at its highest point since June 2008, ACC pointed out.
The council said that the CAB, which has been shown to lead U.S. business cycles by an average of eight months at cycle peaks, now stands at 95.2, up 3.2% over a year ago, and is showing an increased pace of growth over the fourth quarter of 2013.
Overall results in four primary components of the CAB were mixed-to-positive, with product/selling prices, production, and inventories up, while equity prices were flat, but still outpacing the broader market, the ACC reported.