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Economy in Brief

OECD Leaders Decline Broadly
by Tom Moeller April 11, 2005

The Leading Index of the Big 7 OECD economies slipped 0.3% in February following three consecutive months of gain. The decline reversed the earlier improvement in the index's six month growth rate and it fell to 0.3%, the weakest in nearly two years.

During the last ten years there has been a 69% correlation between the change in the leading index and the q/q change in the GDP Volume Index for the Big Seven countries in the OECD.

The 0.1% February decline in the leaders for the European Union (15 countries) was the third in a row and pulled the six month growth rate to 0.5%, it's weakest in nearly two years. The German leaders fell 0.4% m/m and six month growth fell to a barely positive 0.2%. The French leaders slipped for the third consecutive month pulling six month growth to 0.1% and the fourth consecutive monthly decline in the Italian leaders lowered the six month growth rate to -0.9%.

The leading index for the US economy slipped 0.1% following three months of moderate gain leaving six month growth subdued at 1.4%.The leaders for Japan fell 0.8% and six month growth fell to -0.4%.

Growth in the leaders for the UK economy slipped for the fourth consecutive month pulling six month growth solidly negative at -1.6%.The Canadian leaders didn't decline for the first month since last July but six month growth remained a negative 2.7%.

The latest OECD Leading Indicator report can be found here.

OECD Feb Jan Y/Y 2004 2003 2002
Composite Leading Index  102.22 102.48 0.3% 101.99 97.51 96.33
 6 Month Growth Rate 0.3% 0.9%   3.6% 2.5% 2.3%
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