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Benchmark Revisions - November 2006

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Released: Thursday, January 10, 2013

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This month's release incorporates annual benchmark revisions to the composite economic indexes. These regular benchmark revisions bring the indexes up-to-date with revisions in the source data, but 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 incorporated when the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes and their month-over-month changes will no longer be directly comparable to those issued prior to the benchmark revision.
For more information, please visit our us here at
www.conference-board.org/data/bci.cfm or contact indicators@conference-board.org .

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The Conference Board Leading Economic Index® (LEI) for Japan decreased 0.2 percent and The Conference Board Coincident Economic Index® (CEI) also decreased 0.2 percent in November.

  • The Conference Board LEI for Japan fell slightly in November, its eighth consecutive decline. Negative contributions from dwelling units started, the six-month growth rate of labor productivity, real operating profits, and the Tankan business conditions index more than offset a large positive contribution from (inverted) business failures. With this month’s decline, the LEI contracted by 4.3 percent (about a -8.4 percent annual rate) between May and November 2012, sharply down from the increase of 0.8 percent (about a 1.7 percent annual rate) for the previous six months. Nevertheless, the strengths and weaknesses among the leading indicators have remained balanced in the last six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, also fell slightly in November.  The six-month change in the coincident economic index remains negative, declining by 0.7 percent (about a -1.4 percent annual rate), slightly worse than the 0.5 percent decline (about a -1.0 percent annual rate) for the previous six months. The strengths and weaknesses among the coincident indicators have been balanced in the last six months. Meanwhile, Japan’s real GDP contracted by 3.5 percent (annual rate) in the third quarter of 2012, following a decline of 0.1 percent (annual rate) in the second quarter of the year.  
  • The Conference Board LEI for Japan has been declining since early 2012, and as a result its six-month growth rate has remained in negative territory. At the same time, The Conference Board CEI for Japan also declined — and has been on a downward trend since February 2012. Taken together, the composite indexes and their components suggest that the current economic downturn is likely to continue in the near term.

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

With the decrease of 0.2 percent in November, The Conference Board LEI for Japan now stands at 91.7 (2004=100). Based on revised data, this index decreased 0.4 percent in October and declined 0.6 percent in September. During the six-month span through November, the index decreased 4.3 percent, and five of the ten components advanced (diffusion index, six-month span equals 50.0 percent*).

COINCIDENT INDICATORS.  Only one of the four components that make up The Conference Board CEI for Japan increased in November. The positive contributor to the index was wage and salary income. Industrial production, number of employed persons, and the retail, wholesale, and manufacturing sales* component declined in November.

With the decrease of 0.2 percent in November, The Conference Board CEI for Japan now stands at 96.1 (2004=100). Based on revised data, this index increased 0.5 percent in October and declined 0.7 percent in September. During the six-month span through November, the index decreased 0.7 percent, and two of the four components advanced (diffusion index, six-month span equals 50.0 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 9, 2013.  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 and construction.  The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.

*Starting with the January 2013 release, The Conference Board is using the level of the interest rate spread, rather than its monthly change, to calculate the one and six-month diffusion indexes of The Conference Board LEI for Japan.

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

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