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Economy in Brief

OECD LEIs Signal Further Weakness
by Robert Brusca October 10, 2008

The OECD Leading Economic Indicators (trend adjusted cyclical indicators) are continuing to show distress. They point to continuing declines in the economies of the key OECD countries and regions. This report is updated through August and so the side it predicts pre-dates the financial chaos that has since gripped the markets. The OECD likes to look at six month changes in the indices to get the ‘best signal’. On that basis most main indicators are not only falling but the rate of their fall is accelerating. Europe has now moved to the fore in terms of the pace of the unraveling among major countries and regions.

OECD Trend-restored leading Indicators
Growth progression-SAAR
  3-Mos 6-Mos 12-Mos Yr-Ago
OECD -5.1% -4.3% -3.1% 1.2%
OECD7 -7.1% -4.8% -4.1% 0.5%
OECD Europe -10.1% -7.7% -4.9% 0.4%
OECD Japan -5.0% -2.2% -0.5% -3.1%
OECD US -4.0% -3.0% -4.0% 1.8%
Six month readings at 6-Mo Intervals:
  Recent six 6-Mo Ago 12-Mo Ago 18-Mo Ago
OECD -4.3% -1.8% 0.0% 2.4%
OECD7 -4.8% -3.3% -0.2% 1.1%
OECD Europe -7.7% -2.0% -0.5% 1.3%
OECD Japan -2.2% 1.3% -7.2% 1.1%
OECD US -3.0% -5.0% 2.2% 1.5%
Slowdowns indicated by BOLD RED
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