The Chemical Activity Barometer, a leading economic indicator created by the American Chemistry Council, was up by 1.6% in September on a three-month moving average (3MMA) basis, following a 2.5% gain in August.

On a year-over-year (Y/Y) basis, the barometer was down 4.3% in September.

The unadjusted data show a 0.7% gain in September following a 2.2% increase in August and a 1.9% rise in July.

The CAB diffusion index rose from 35% to 65% in September. The diffusion index marks the number of positive contributors relative to the total number of indicators that are monitored.

The CAB reading for August was revised upward by 0.89 points and the reading for July was revised upward by 0.42 points.

“With five consecutive months of gains, the September CAB reading is consistent with recovery in the U.S. economy,” said Kevin Swift, chief economist at ACC.

CAB’s four main components, each consisting of a variety of indicators are: production; equity prices; product prices; and inventories and other indicators.

In September, production-related indicators were mixed. Trends in construction-related resins, pigments and related performance chemistry were positive and suggest further gains, the council said.

Resins and chemistry used in light vehicles and other durable goods were positive. Increases in plastic resins used in packaging and for consumer and institutional applications were mixed because economic recovery in the service sector slowed.

Performance chemistry improved, while U.S. exports were mixed. Equity prices flattened, and product and input prices were fairly stable.

The council also reported that inventory and other supply chain indicators were positive.