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Economy in Brief

OECD Slowdown is Broad-Based and More Severe
by Robert Brusca November 10, 2008

The OECD trend-adjusted cyclical leading indicators showed a clear pattern of growth deteriorating in the OECD region. The downturn is of increasing severity. Even Japan after a brief flirtation with improving is getting weaker again. Over 3, 6 and 12 months it is Europe that is now declining the most rapidly.

The OECD prefers to look at these indicators over six months. On that basis the weakness is just as present. As we prepare for the G-20 meeting the OECD area is shrinking rapidly.

Over six months the pace of decline for the OECD is at a rate of 6.5%. Six months ago the six month pace for that index was -2%. One year ago the pace was just -0.8%. And 18n months ago that pace was an increase of 2.5%. All that amounts to a pretty fast drop off. That is the sort of thing that is typical, not of a slowdown, but of a recession.

OECD Trend-Restored Leading Indicators
Growth Progression-SAAR
  3Mos 6Mos 12mos Yr-Ago
OECD -9.8% -6.5% -4.3% 0.8%
OECD 7 -11.1% -6.7% -5.0% 0.0%
OECD Europe -12.1% -9.2% -5.8% 0.2%
OECD Japan -6.8% -2.3% 0.0% -4.0%
OECD US -10.6% -5.6% -5.3% 1.3%
Six month readings at 6-Mo Intervals
  Recent six 6Mo Ago 12Mo Ago 18MO Ago
OECD -6.5% -2.0% -0.8% 2.5%
OECD 7 -6.7% -3.2% -1.2% 1.3%
OECD Europe -9.2% -2.3% -1.0% 1.3%
OECD Japan -2.3% 2.2% -7.8% -0.1%
OECD US -5.6% -5.0% 0.8% 1.9%
Slowdowns indicated by BOLD RED.
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