Global Business Cycle Indicators
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Released: Tuesday, March 11, 2014
The Conference Board Leading Economic Index®(LEI) for Japan decreased 0.7 percent and The Conference Board Coincident Economic Index® (CEI) increased 0.3 percent in January.
- The Conference Board LEI for Japan fell for the second consecutive month in January. New orders for machinery and construction, stock prices and dwelling units started made large negative contributions to the index. As a result, the leading economic index’s six-month change was at 1.6 percent growth (about a 3.3 percent annual rate) from July 2013 to January 2014, a sharp decline from the improvement of 5.7 percent (about an 11.7 percent annual rate) in the previous six months. However, the strengths among the leading indicators continued to be very widespread.
- The Conference Board CEI for Japan increased in January, with only the number of employed persons making a negative contribution to the index this month. The six-month growth rate of the coincident economic index for the period ending in January 2014 improved to 0.9 percent (about a 1.9 percent annual rate) from 0.2 percent (about a 0.4 percent annual rate) in the previous six months. In addition, the strengths among the coincident indicators continued to be widespread. At the same time, real GDP expanded by 0.7 percent (annual rate) in the fourth quarter of 2013, after growth of 1.0 percent (annual rate) in the quarter before.
- The Conference Board LEI declined again in January and its six-month rate of growth has slowed considerably in recent months. Meanwhile, the CEI has been improving, and its six-month growth rate has increased moderately over the past several months. Taken together, the slower growth in the LEI, coupled with moderate growth in the CEI, suggest that the current expansion in economic activity is quite unlikely to accelerate in the coming months.
LEADING INDICATORS. Five 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, real money supply, the Tankan business conditions survey, the interest rate spread, and real operating profits*. The negative contributors – in order from the largest negative contributor to the smallest – include the new orders for machinery and construction component*, stock prices, dwelling units started, the six month growth rate of labor productivity, and (inverted) business failures.
With the decrease of 0.7 percent in January, The Conference Board LEI for Japan now stands at 100.4 (2004=100). Based on revised data, this index decreased 0.2 percent in December and increased 0.5 percent in November. During the six-month span through January, the index increased 1.6 percent, and nine of the ten components advanced (diffusion index, six-month span equals 90.0 percent).
COINCIDENT INDICATORS. Three of the 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 and the retail, wholesale, and manufacturing sales* component. The number of employed persons declined in January.
With the increase of 0.3 percent in January, The Conference Board CEI for Japan now stands at 97.1 (2004=100). Based on revised data, this index increased 0.1 percent in December and in November. During the six-month span through January, the index increased 0.9 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” 9:00 A.M. ET March 10, 2014. Some series are estimated as noted below.
* The series in The Conference Board LEI that are based on our estimates are the six month growth rate of labor productivity, 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.
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