by Calculated Risk on 10/22/2013 12:32:00 PM

I'll have more on the employment report later, but this is a new indicator that I'm following that appears to be a leading indicator for the economy.

From the American Chemistry Council: Fourth Quarter to End Strong Shows Leading Economic Indicator

The partial shutdown of the federal government earlier this month didn’t take the steam out of the U.S. economy, according to the American Chemistry Council’s (ACC) monthly Chemical Activity Barometer (CAB), released today. The Chemical Activity Barometer is a leading economic indicator, shown to lead U.S. business cycles by an average of eight months at cycle peaks, and four months at cycle troughs. The barometer increased 0.3 percent over September on a three-month moving average (3MMA) basis, and remains up 3.1 percent over a year ago. It continues to be at its highest point since June 2008. Prior CAB readings for July through September were slightly revised.

“Despite the uncertainty being fueled by political gridlock in Washington, the fundamentals of our economy appear to be healthy,” said Dr. Kevin Swift, chief economist at the American Chemistry Council. This month’s Chemical Activity Barometer is up 0.3 percent and this follows upticks in August and September as well,” he said.
emphasis added

Click on graph for larger image.

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 that economic activity is increasing.