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Benchmark Revisions - November 2006

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Released: Tuesday, September 10, 2013

The Conference Board Leading Economic Index®  (LEI) for Japan remained unchanged and The Conference Board Coincident Economic Index® (CEI) increased 0.2 percent in July.

  • The Conference Board LEI for Japan remained unchanged in July following a decline in June. Gains from the (inverted) business failures and the Tankan business conditions survey were offset by negative contributions from the index of overtime worked and money supply. Between January and July 2013, the LEI increased 4.8 percent (about a 9.9 percent annual rate), sharply up from the 0.1 percent increase (about a 0.2 percent annual rate) during the previous six months. Moreover, the strengths among the leading indicators have remained very widespread, with all leading indicators advancing over the past six months.
  • The Conference Board CEI for Japan, a measure of current economic activity, increased slightly in July. The CEI grew by 0.3 percent (about a 0.6 percent annual rate) during the six-month period ending July 2013, a reversal from the decline of 0.3 percent (about a -0.6 percent annual rate) during the previous six months. In addition, the strengths among the coincident indicators have remained more widespread than the weaknesses in recent months. Meanwhile, Japan’s real GDP grew 2.6 percent (annual rate) in the second quarter of 2013, down from 3.8 percent (annual rate) in the first quarter.  
  • The Conference Board LEI for Japan was unchanged in July, but its six-month growth rate remains near its highest rate for the last three years with widespread strengths among the components. At the same time, The Conference Board CEI for Japan increased slightly in July, and its six-month growth rate remains higher than for most of 2012. Taken together, although the rate of improvement in both the LEI and CEI seems to have moderated a bit in the last two months, the overall trend and widespread strength in the indexes suggests that the economy is likely to continue expanding in the coming months.

LEADING INDICATORS.  Five of the ten components that make up The Conference Board LEI for Japan increased in July.  The positive contributors to the index – in order from the largest positive contributor to the smallest – include the (inverted) business failures, the Tankan business conditions survey, the new orders for machinery and construction component*, the interest rate spread, and real operating profits*.  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 money supply, and stock prices.  Dwelling units started remained unchanged in July.

With no change in July, The Conference Board LEI for Japan now stands at 98.0 (2004=100).  Based on revised data, this index decreased 0.6 percent in June and increased 0.9 percent in May.  During the six-month span through July, the index increased 4.8 percent, and all ten components advanced (diffusion index, six-month span equals 100.0 percent).

COINCIDENT INDICATORS.

Two of the four components that make up The Conference Board CEI for Japan increased in July. The positive contributors to the index – in order from the larger positive contributor to the smaller – include industrial production and number of employed persons.  Wage and salary income and the retail, wholesale, and manufacturing sales* component declined in July.

With the increase of 0.2 percent in July, The Conference Board CEI for Japan now stands at 96.7 (2004=100).  Based on revised data, this index decreased 0.6 percent in June and increased 0.3 percent in May.  During the six-month span through July, the index increased 0.3 percent, and three of the four components advanced (diffusion index, six-month span equals 75.0 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 September 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.  The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.

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

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