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Released: Tuesday, March 13, 2012

The Conference Board Leading Economic Index® (LEI) for Japan increased 0.3 percent The Conference Board Coincident Economic Index® (CEI) increased 0.4 percent in January.

  • The Conference Board LEI for Japan increased again in January following a small gain in December. Large positive contributions from the index of overtime worked and the six-month growth rate of productivity more than offset a negative contribution from business failures (inverted).  With this month’s gain, the six-month growth rate of the leading economic index was 1.2 percent (about a 2.3 percent annual rate) between July 2011 and January 2012, a reversal from the decline of 1.9 percent (about a -3.7 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have been more widespread than the weaknesses in recent months. 
  • The Conference Board CEI for Japan, a measure of current economic activity, also increased in January with all components advancing from last month.  The coincident economic index increased by 3.6 percent (about a 7.3 percent annual rate) between July 2011 and January 2012, a large improvement from the decline of 4.1 percent (about a -8.1 percent annual rate) for the previous six months. Meanwhile, real GDP growth declined by 2.3 percent in the fourth quarter of 2011, following a 7.0 percent increase in the third quarter of the year.
  • The Conference Board LEI for Japan continued its slightly upward trend through the first months of this year, after falling sharply following the March 2011 earthquake. The six-month growth rate in the index has returned to positive territory since October 2011. Meanwhile, the rate of growth in The Conference Board CEI for Japan has also recovered, but the index is still below its most recent peak reached in the beginning of 2011. Taken together, the composite indexes and their components suggest that economic activity should improve in the coming months.

LEADING INDICATORS.  Six of the ten components that make up The Conference Board LEI for Japan increased in January.  The positive contributors to the index – in order from the largest positive contributor to the smallest – include the index of overtime worked, the six month growth rate of labor productivity, stock prices, dwelling units started, the interest rate spread, and the new orders for machinery and construction component*.  The negative contributors – in order from the largest negative contributor to the smallest – include the (inverted) business failures, real money supply, and the Tankan business conditions survey. Real operating profits* remained unchanged in January.

With the increase of 0.3 percent in January, The Conference Board LEI for Japan now stands at 95.3 (2004=100).  Based on revised data, this index increased 0.2 percent in December and remained unchanged in November.  During the six-month span through January, the index increased 1.2 percent, and seven of the ten components advanced (diffusion index, six-month span equals 65.0 percent).

COINCIDENT INDICATORS.  All four components that make up The Conference Board CEI for Japan increased in January. The positive contributors to the index – in order from the largest positive contributor to the smallest – include industrial production, wage and salary income, number of employed persons, and the retail, wholesale, and manufacturing sales* component. 

With the increase of 0.4 percent in January, The Conference Board CEI for Japan now stands at 98.2 (2004=100).  Based on revised data, this index increased 0.4 percent in December and declined 0.1 percent in November.  During the six-month span through January, the index increased 3.6 percent, and all four components advanced (diffusion index, six-month span equals 100.0 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” 10:00 A.M. ET March 12, 2012.  Some series are estimated as noted below.

* The series in The Conference Board LEI that are based on our estimates are real operating profits and new orders for machinery.  The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.

**According to The Statistics Bureau and the Director-General for Policy Planning of Japan, figures in the Number of Employed Persons series from the three regions (Iwate, Miyagi and Fukushima) affected by the March 11th earthquake were missing from March through August 2011.  From September 2011 on, this series again includes data for the whole of Japan. Thus, this series shows a sharp decline in March 2011 and a substantial gain in September 2011. 

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

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StraightTalk®

Straight Talk November 2013

StraightTalk® Global Economic Outlook 2014: Time to realize the opportunities for growth

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GDP is projected to grow by 2.0 percent in 2014 with the second half of this year revised lower from an average of a 2.8 percent pace to about 2.5 percent pace.

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