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Benchmark Revisions - November 2006

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Released: Tuesday, February 12, 2013

The Conference Board Leading Economic Index®  (LEI) for Japan increased 0.1 percent while The Conference Board Coincident Economic Index®  (CEI) decreased 0.2 percent in December.

  • The Conference Board LEI for Japan improved slightly in December, following eight consecutive declines. Large positive contributions from stock prices and real money supply more than offset negative contributors from the Tankan business conditions index and dwelling units started. Despite the small increase in December, the LEI fell by 2.7 percent (about a -5.2 percent annual rate) in the second half of 2012, more than the decline of 0.6 percent (about a -1.3 percent annual rate) for the previous six months. Nevertheless, the strengths and weaknesses among the leading indicators have remained somewhat balanced in the last six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, fell slightly in December. In the second half of 2012, the coincident economic index declined by 1.2 percent (about a -2.5 percent annual rate), after a 0.7 percent fall-off (about a -1.4 percent annual rate) for the previous six months. In addition, the weaknesses among the coincident indicators have been very widespread in the last six months, with all components declining. 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 increased slightly in December after declining for most of 2012. As a result, the six-month growth rate remains negative, but the decline has slowed since the third quarter of the year. At the same time, The Conference Board CEI for Japan fell marginally in December, continuing its downward trend which began in early 2012. Taken together, the composite indexes and their components suggest that the economic downturn is likely to persist in the near term, though the rate of contraction may ease.

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

With the increase of 0.1 percent in December, The Conference Board LEI for Japan now stands at 91.7 (2004=100). Based on revised data, this index decreased 0.2 percent in November and decreased 0.5 percent in October. During the six-month span through December, the index decreased 2.7 percent, and six of the ten components advanced (diffusion index, six-month span equals 60.0 percent).

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

With the decrease of 0.2 percent in December, The Conference Board CEI for Japan now stands at 95.7 (2004=100). Based on revised data, this index decreased 0.3 percent in November and increased 0.4 percent in October. During the six-month span through December, the index decreased 1.2 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 February 11, 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.  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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