Recent Updates
- US: GDP by Industry (Q1)
- Canada: Retail Trade (May), CPI (Jun)
- Thailand: Trade (Jun); China: Loans from Financial Institutions (Jun); Korea: Trade in Goods (Jun); Taiwan: Export Orders (Jun)
- Turkey: NCI Index (Jul)
- Turkey: Established & Liquidated (Jun-Press); Morocco: CPI, Public Finance (Jun)
- Spain: Workers Affected by Layoffs (Apr); Foreign Trade (May)
- more updates...
Economy in Brief
German PPI Rises at Nine-Month High Pace
The German PPI gained 0.2% in June on the heels of a 0.6% rise in May...
U.S. Leading Economic Indicators Improve
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (5.8% y/y) during June...
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July...
U.S. Initial Unemployment Insurance Claims Hit Lowest Since 1969
Initial claims for unemployment insurance dropped to 207,000 during the week ended July 14...
Japan's Trade Deficit Swings Back to Surplus (Small Surplus)
Japan's early June trade results show a goods trade position having swung back to surplus in June from deficit in May...
by Tom Moeller July 11, 2005
The Leading Index of the Major 7 OECD economies fell for the fourth straight month in May. The 0.2% decline pulled the index down 1.3% since December and lowered six month growth in the index to a negative 1.8%, the weakest since March 2003.
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.
A 0.2% decline in May coupled with downward revisions to earlier months' data caused the leaders for the European Union (15 countries) to extend their decline to six consecutive months. Six month growth dropped to a negative 0.9%.
German leaders fell for the seventh month in the last eight. The 0.2% decline was caused by weaker new orders, a more sharply negative yield curve and a depressed business climate. Ssix month growth in the leading index fell to -2.1%, the worst in three and a half years. The French leaders also fell by 0.2% with six month growth a negative 1.3%. The yield curve was about dead flat and prospects for the industrial sector dimmed. The Italian leading index fell a hard 0.5% in May. This seventh consecutive decline lowered the six month growth rate to -2.8% and was caused by continued souring of consumer confidence as well as a weaker future tendency of orders books.
The UK economic leaders continued down and fell 0.4% for the second month. Six month growth fell to -1.9% due to even weaker consumer confidence and weaker prospects for production.The 1.0% decline in the leaders for Japan was double the drop in April, was the fifth decline this year and caused six month growth to fall to a negative 3.5%, the worst since late 2001.
The leading index for the US economy rose a modest 0.2%. The first increase since January improved six month growth slightly to -1.0% but the May increase was entirely due to higher durable goods (aircraft) orders. The Canadian leaders also moved higher by 0.4% and six month growth improved to a -0.3%. Share prices rose in May but other leading indicator components fell.
The latest OECD Leading Indicator report is available here.
| OECD | May | April | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Composite Leading Index | 100.97 | 101.17 | -1.0% | 101.98 | 97.52 | 96.33 |
| 6 Month Growth Rate | -1.8% | -1.6% | 3.5% | 2.5% | 2.3% |
