Did partial shutdown undermine the economy?
According to the American Chemistry Council’s Chemical Activity Barometer (CAB), the partial shutdown of the federal government during the first half of October did not have a significantly negative impact on the economy.
The CAB is a leading economic indicator, demonstrated to lead U.S. business cycles by about eight months at cycle peaks and four months at cycle troughs.
According to the CAB, activity increased 0.3% in September on a 3-month moving average, and was 3.1% higher than in September 2012. The CAB is at its highest point since June 2008.
Dr. Kevin Swift, chief economist at the American Chemistry Council, said:
“Despite the uncertainty being fueled by political gridlock in Washington, the fundamentals of our economy appear to be healthy. This month’s Chemical Activity Barometer is up 0.3 percent and this follows upticks in August and September as well.”
Some reports have hinted that consumer spending has slowed down. However, Swift believes these data relate to news coming out of Washington. Swift said “Production of plastic resins used in consumer applications appears actually to be strengthening, suggesting further gains driven by consumers. This bodes well for retailers as the important holiday shopping season approaches.”
According to the CAB, chemical equities are still outpacing the overall market, as measured by the S&P 500, inventories and new orders have increased, probably restored by a return of business confidence after the government shutdown ended.
Chemical Activity Barometer for the Latest Six Months and Year-Ago Month
|CAB (3 MMA)||90.7||92.3||92.5||92.7||92.9||93.2||93.6|
*Percentage changes may not reflect index values due to rounding.
Confidence drops since the partial shutdown, say polls
Confidence in the American economy has dipped to its lowest level in 2013, says a new poll. A CNN/ORC International survey also reported growing pessimism.
During the poll, which was conducted during the weekend, 71% of respondents believe economic conditions are currently “poor”, four percentage points more than just before the partial shutdown.
In September, only 148,000 jobs were added, less that the 180,000 expected by experts. The unemployment rate fell from 7.3% in August to 7.2% in September.