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Benchmark Revisions - November 2006

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Released: Thursday, November 4, 2004

The Conference Board reports today that the leading index for Japan decreased 0.3 percent and the coincident index decreased 0.2 percent in September.

  • The leading index declined again in September, but there also were upward revisions to the previous several months. The leading index has been increasing rapidly since early 2003, at an average annual rate of about 6.0 percent. There have been short-term fluctuations around this average, including a slowing to about 4.5 percent in recent months.
  • Correspondingly, real GDP growth has been fluctuating around a 4.5 percent average annual rate since the second quarter of 2003, including a slowdown to only 1.3 percent in the second quarter of 2004. The recent behavior of the leading index suggests that the economy will continue to grow, probably at a higher rate than in the second quarter but lower than the 4.5 percent average over the last year and a half.

Leading Indicators.Six of the ten components that make up the leading index increased in September. The positive contributors to the index – in order from the largest positive contributor to the smallest – include dwelling units started, real operating profits*, the Tankan business conditions survey, real money supply, stock prices, and the index of overtime worked. Four of the ten components that make up the leading index declined in September. The negative contributors to the index – in order from the largest negative contributor to the smallest – include the six month growth rate of labor productivity, new orders for machinery and construction*, the (inverted) business failures, and yield spread.

With the decrease of 0.3 percent in September, the leading index now stands at 98.8 (1990=100). Based on revised data, this index decreased 0.4 percent in August and increased 0.2 percent in July. During the six-month span through September, the index increased 2.4 percent, and eight of ten components advanced (diffusion index, six-month span equals 85.0 percent).

Coincident Indicators.Three of the six components that make up the coincident index increased in September. The positive contributors to the index – in order from the largest positive contributor to the smallest – include real retail sales, wage and salary income*, and real manufacturing sales*. Real wholesale sales, number of employed persons, and industrial production declined in September.

With the decrease of 0.2 percent in September, the coincident index now stands at 100.5 (1990=100). Based on revised data, this index increased 0.1 percent in both August and July. During the six-month span through September, the index decreased 0.3 percent, and three of the six components advanced (diffusion index, six-month span equals 50.0 percent).

Data Availability.The data series used to compute the two composite indexes reported in this release are those available “as of” 5:00 P.M. ET November 3, 2004. Some series are estimated as noted below.

Notes: The series in the leading index that are based on The Conference Board estimates are real operating profits and six month growth rate of labor productivity. The series in the coincident index that are based on The Conference Board estimates are real manufacturing sales and wage and salary income.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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