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Economy in Brief

OECD Indicators Begin To Turn Up
by Robert Brusca July 10, 2009

The OECD LEIs are giving off much more optimistic signals theses days. Ordinary progressive growth rates ( 12-mo to 6-mo to 3-mo) in the table’s top panel show that decelerations in the indicators have ceased across the OECD area for these major groupings. Japan is still declining over three-months, however, its pace of decline has been cut. The US, the e-Area and the OECD area as whole show positive three-month growth rates as of May.

In the chart’s bottom panel we look at six month interval growth rates since the OECD prefers this horizon for its trend-restored leading indicators. On this basis decelerations in the indicators have stopped across these main OECD grouping except in Japan. Only the e-Area is showing an increase in its indicator over six months. The US pace of decline in the OECD indictor has been cut sharply over the recent six months, compared to six month ago. Given its embedded patterns, the US indicator over six months should be showing advances in one or two months as long as there is no backsliding.

On balance the OECD trend-restored leading indicts are giving off positive signals. Every major region is showing some progress. Japan which is still having the most difficult time is making progress in its short term growth gauges not at the six-month horizon that the OECD prefers. Still, it’s progress.

Growth progression-SAAR
  3Mos 6Mos 12mos Yr-Ago
OECD 4.9% -2.7% -8.2% -2.2%
OECD7 3.2% -4.9% -9.8% -2.7%
OECD.E Area 9.1% 1.8% -5.8% -2.7%
OECD. Japan -11.9% -18.1% -17.1% -3.0%
OECD US 4.0% -5.4% -10.3% -2.4%
Six month readings at 6-Mo Intervals:
  Recent six 6Mo Ago 12Mo Ago 18MO Ago
OECD -2.7% -13.4% -2.9% -1.5%
OECD7 -4.9% -14.5% -3.2% -2.2%
OECD.Eur 1.8% -12.9% -4.5% -0.9%
OECD.Japan -18.1% -16.1% -0.6% -5.4%
OECD US -5.4% -15.0% -3.0% -1.7%
Slowdowns indicated by BOLD RED
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