Recent Updates
- US: Consumer Sentiment (Aug-prelim), Import/Export Prices (Jul)
- US: Consumer Sentiment Detail (Aug-prelim)
- US: Vehicle Miles Driven by State (Jun)
- Bulgaria: Agricultural PPI (Q2) Central Bank Survey (Jul)
- Blue Chip: Blue Chip Economic Indicators (Aug)
- more updates...
Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller December 12, 2005
The Leading Index of the Major 7 OECD economies posted its fifth consecutive monthly increase in October with a 0.4% increase that doubled the gains of the prior two months. The increase raised the leaders' six month growth rate to 1.7%, the best since August 2004 and gains were broad based amongst countries.
During the last ten years there has been a 66% 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 leading index for Japan jumped 0.9% after a downwardly revised 0.5% September increase. Share prices and construction rose lifting the six month growth rate to a firm 3.0% and its correlation with real economic growth in Japan has been a meaningful 42% during the last ten years.
Leaders in the European Union (15 countries) rose 0.3%. This fifth consecutive monthly increase raised the six month growth rate to 2.5%. During the last ten years there has been a 60% correlation between the change in the leading index and the q/q change in the GDP volume index for the European Union.
German leaders increased for the six consecutive month and a 0.7% gain was the strongest since July. The six month growth rate improved to 4.4% as new orders rose to the highest since 1992. The correlation between the leaders and the change in the German GDP volume index has been a low 19% during the last ten years.
The French leaders increased 0.5% increase and the gain pulled the six month growth rate further into positive territory at 1.5%. Prospects for the industrial sector rose to the best level in a year. The correlation between the leaders' growth and France's GDP volume index has been 43% during the last ten years. The Italian leading index were unchanged following two months of increase. Nevertheless, the six month growth rate improved to 0.3% though earlier growth rates were revised down. Its correlation with GDP growth has been a low 0.9% during the last ten years.
The U.S. leaders rose 0.2% following two months of decline and six month growth in the leaders improved to a modest 1.2%. The correlation between the leaders and real GDP growth has been a high 58% during the last ten years.
The UK leaders fell 0.1% for the second straight month. Declines in consumer confidence, new car registrations, share prices and the future tendency of production dropped the six month growth rate to -0.3% and its correlation with real GDP growth has been 29% during the last ten years. The Canadian leaders also fell for the second month and the 0.1% decline dropped six month growth to -0.8%. The correlation of the leaders' growth with Canadian real GDP has been 49% during the last ten years.
The latest OECD Leading Indicator report is available here.
Cross-Country Productivity Growth from the Federal Reserve Bank of St. Louis is available here.
OECD | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Composite Leading Index | 103.37 | 102.99 | 1.0% | 102.36 | 97.84 | 96.45 |
6 Month Growth Rate | 1.7% | 1.1% | 3.6% | 2.7% | 2.3% |