The U.S. economy is moving from “slow” to “moderate” growth, according to the Chemical Activity Barometer released today. Launched by the American Chemistry Council as a leading economic indicator, the barometer in July increased 0.2% to 93.0, its highest reading since its initial release in June 2012.
All four components of the CAB (production, equity prices, product/selling prices and inventories) were up.
“The Chemical Activity Barometer is signaling a moderately-improving U.S. economy into early-2014,” says Dr. Kevin Swift, chief economist at the American Chemistry Council. “Although other recent economic reports have been mixed, fundamentals appear strong, with housing demand still growing and consumers still spending,” he added.
Swift pointed out that recent negative housing reports likely reflect a pause rather than a change of trajectory. Permits remain higher than housing starts, mortgage rates remain low, and employment prospects are improving, he explained.
Plastic resins used in consumer and institutional applications are strengthening. Retail sales are likely to continue to strengthen as moderate job creation outweighs the lingering effects of payroll tax increases, Swift predicts.
Last week, the U.S. Federal Reserve released its "Beige Book" report, which characterized recent economic growth as “modest to moderate.” The bank reported an expansion of manufacturing activity in most regions, led by companies tied to housing and the automotive industry.