Note: This appears to be a leading indicator for industrial production.



From the American Chemistry Council: Chemical Activity Barometer Begins To Cool At Start of 4th Quarter; Year-Over-Year Growth Continues To Ease



he Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), posted a 0.2 percent gain in October on a three-month moving average (3MMA) basis. The barometer is up 3.8 percent (3MMA) year-over-year. The pace of growth has slowed form earlier in the year. The unadjusted measure of the CAB declined 0.2 percent in October.

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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.

emphasis added

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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 softened recently, suggesting further gains in industrial production in 2018 and early 2019, but at a slower pace.