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Economy in Brief

OECD Composite Leading Indicators: Moderate Slowing
by Robert Brusca March 7, 2008

The OECD CLIs are largely still falling over the most recent three months, but generally the three-month drops are at a slower pace than the pace of the declines over six months. That is not the best news but it is good news of sorts. Of course the US is an exception to this observation since the three-month US decline is accelerating. Japan is the other sort of exception with an actual rise over three months and rise over six months. Japan had hit the skids in CLI terms ahead of the pack. In real time Japan’s economy is still slipping.

We can hope that Japan’s resurgent indicator implies that it has shrugged off a brush with recession. But the fact that key US economy is sinking faster than anyone else should give us pause about rosy scenarios. For the most part the OECD characterizes these results as consistent with a moderate slowdown. But with some of the recent weak data in the US, recent financial market turmoil that has reappeared, and the CLI trend there is clear downside risk.

OECD Trend-restored leading Indicators
Growth progression-SAAR
  3Mos 6Mos 12mos Yr-Ago
OECD -1.0% -2.4% -0.4% 1.6%
OECD 7 -3.3% -4.2% -1.4% 0.6%
OECD.Europe -0.9% -2.0% -0.8% 2.0%
OECD.Japan 8.9% 0.5% -1.8% 1.0%
OECD US -6.8% -6.0% -1.2% 0.2%
Six month readings at 6-Mo Intervals:
  Recent six 6Mo Ago 12Mo Ago 18MO Ago
OECD -2.4% 1.7% 2.1% 1.2%
OECD 7 -4.2% 1.5% 1.1% 0.1%
OECD.Europe -2.0% 0.4% 1.3% 2.7%
OECD.Japan 0.5% -4.1% 1.3% 0.7%
OECD US -6.0% 3.8% 1.5% -1.1%
Slowdowns indicated by BOLD RED
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