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Benchmark Revisions - November 2006

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Released: Thursday, January 8, 2009

This month's release incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, the base year of the composite economic indexes has been changed to 2004=100 from 1990=100. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes will not be comparable to those issued prior to the benchmark revision.

For more information, please visit our website at http://www.conference-board.org/economics/bci/ or contact us at indicators@conference-board.org.

The Conference Board Leading Economic Index (LEI) for Japan decreased 2.6 percent and The Conference Board Coincident Economic Index (CEI) decreased 0.9 percent in November.

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Download a PDF of the full press release in Japanese.

  • The leading economic index registered another sharp decline in November, following an equally large decline in October. In November, most of the leading indicators continued their downward trend. With November's large decline, the six-month growth rate for the leading index fell to -10.4 percent (about a -19.8 percent annual rate) from May to November 2008, the weakest in more than 33 years. Moreover, during the last six months, the weaknesses among the leading indicators continued to be very widespread.
  • The coincident economic index also declined in November. Industrial production and the real retail, wholesale, and manufacturing sales components both made large negative contributions to the index. The six-month growth rate of the coincident index fell to -3.3 percent (a -6.4 percent annual rate), also its lowest level since 1975. The weaknesses among the coincident indicators continued to be very widespread, as all four components declined in the last six months. At the same time, real GDP continued its downtrend through the third quarter of 2008 — it declined at a 1.9 percent annual rate (revised down from the 0.4 percent decline previously reported),. This is the first time since the second half of 2001 that real GDP has declined in consecutive quarters.
  • The rate of decline in the leading economic index has accelerated in recent months, and the coincident economic index has also been falling since late 2007. In addition, the weaknesses in both composite indexes have been very widespread during this period. Taken together, the accelerating and widespread deterioration in the leading and coincident economic indexes suggests that the contraction in economic activity is likely to continue into 2009.

LEADING INDICATORS. Two of the ten components that make up the leading economic index increased in November. The positive contributors to the index — in order from the larger positive contributor to the smaller — include real money supply and interest rate spread. The negative contributors — in order from the largest negative contributor to the smallest — include the index of overtime worked, the six-month growth rate of labor productivity, real operating profits*, the Tankan business conditions survey, the (inverted) business failures*, dwelling units started, stock prices, and the new orders for machinery and construction component*.

With the decrease of 2.6 percent in November, the leading economic index now stands at 89.4 (2004=100). Based on revised data, this index decreased 2.5 percent in October and decreased 1.6 percent in September. During the six-month span through November, the index decreased 10.4 percent, and two of the ten components advanced (diffusion index, six-month span equals 20.0 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident economic index increased in November. The positive contributors to the index — in order from the larger positive contributor to the smaller — include number of employed persons and wage and salary income*. Industrial production and the retail, wholesale, and manufacturing sales* component declined in November.

With the decrease of 0.9 percent in November, the coincident economic index now stands at 100.5 (2004=100). Based on revised data, this index decreased 0.4 percent in October and decreased 0.1 percent in September. During the six-month span through November, the index decreased -3.3 percent, and none of the four components advanced (diffusion index, six-month span equals 0.0 percent).

DATA AVAILABILITY AND NOTES. The data series used to compute The Conference Board Leading Economic Index (LEI) for Japan and The Conference Board Coincident Economic Index (CEI) for Japan reported in this release are those available "as of" 5:00 P.M. ET January 7, 2009. Some series are estimated as noted below.

* The series in the leading economic index that are based on The Conference Board estimates are real operating profits and new orders for machinery. The series in the coincident economic 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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