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Economy in Brief

OECD LEIs Show Upswing Has Topped Out…in July 
by Robert Brusca September 7, 2007

The OECD leading indicator tells a solid story of business expansion past and future. The current reading is not quite what we would like, however. The rise in these indicators that came – on a six month change basis - in March of this year have been swept away by events. The Euro area index never had much of a pop. On reflection, it seems to be in a longer term declining mode. But it did have a bit of an uptick earlier this year. Japan has simply been and continues to be sickly. These indicators, that are forward-looking, may contrast with some of the things you have heard about the strength of the global expansion recently, even from our own Treasury Secretary. One of the things he has said is that he can’t image a really weak US economy with such a strong global economy. Guess what? That global economy isn’t so strong any more.

The US as always has the greatest amplitude on this chart. It has had the strongest rebound and now is beginning to back off. These data do not even draw from the period when financial turmoil reared up.

OECD Leading Indicators by Main regions/countries
  Jul-07 Jun-07 May-07 3-Mo 6-Mo 12-Mo
OECD -0.1% 0.3% 0.5% 2.4% 2.5% 4.0%
OECD7 -0.2% 0.3% 0.5% 2.5% 2.4% 3.1%
OECD Europe -0.2% 0.1% 0.2% 0.5% 0.7% 2.1%
OECD Japan -0.8% -0.4% 0.0% -4.5% -2.7% -1.8%
OECD US 0.0% 0.7% 0.7% 5.8% 4.9% 5.8%
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