· During the last ten years there has been a 77% correlation between the leaders' growth rate and the two quarter change in the GDP Volume Index for the Big 7 countries in the OECD.

· The leading index in Japan turned negative for the third straight month, with six-month growth falling to -1.5% There has been a 45% correlation during the last ten years between the leaders and real GDP growth in Japan. Net foreign trade has contributed significantly to the leaders' deterioration.

· The leaders for the United States fell for the third straight month and six month growth fell to just 0.2% with a tighter yield curve, lower consumer sentiment & a lower business climate indicator offsetting other component gains.

· The leading index growth rate for the European Union has held up well relative to other countries, with gains logged during the last four months, though six-month growth fell to 2.5% from a peak of 6.2% late last year. Growth in the German leaders fell to 2.0% in October versus 8.3% in January as a result of a tighter yield curve and a slower orders inflow. Leaders in Italy improved some with the six-month growth rate slightly positive after several months negative; the decline in consumer confidence stabilized. In France, the leading index growth rate decelerated to 3.7% versus 8.2% at the start of the year and growth in the UK leaders improved to 1.1% after two months negative during the summer.

· In Canada the leaders went further negative with a tighter yield curve.

· Visit the OECD at this website.

2002

2001