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Economy in Brief
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
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The spread of the virus in Franc is still untamed...
U.S. Home Builder Sentiment Slips in January
The Composite Housing Market Index from the NAHB-Wells Fargo declined 3.5% m/m (+10.7% y/y) in January...
Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Robert Brusca August 7, 2009
The OECD LEIs are now jumpin.’ The rise is strongly
accelerating across OECD countries; even Japan whose indicator is still
falling is seeing a substantial shift in its negative growth rate to a
substantially diminished pace of decline. The detailed progressive
growth rates from 12-months to six months to three months show that the
acceleration is well in force. The OECD’s preferred reading is on the
six month growth rate. The US rate is now flat compared to declining at
a 16% pace six months ago. The European index is up at a very strong
6.4% pace after dropping at a 12% rate six months ago. Japan is falling
at a 7% rate after dropping at a 22% rate six months ago. What a
difference a half year makes.
The United State’s own LEI from the Conference Board usually
carves out lower recession lows than the OECD LEI for the US. The
Conference Board indicator usually carves out higher highs in the
transition to recovery, by a small amount, as well. In this recession
however the OECD LEI for the US is much weaker than the low for the
Conference Board’s measure based on percentage drops in the respective
indices. As a result, while the OECD index has a bigger US turnaround
from its low to its present value, the positive reading on the
Conference Board LEI is far stronger that the current OECD LEI signal
(the OECD measure is flat over six months).
Different measures capture different aspects of the economy’s
weakness. Right now both of these measures have the same sort of
positive momentum to different degrees but positive momentum
nonetheless. It is interesting that the European economies are showing
much more momentum in this framework. We will have to keep our eye on
the economies and see if European economic performance can live up to
the strong positive signal the OECD has for that region.
OECD Trend-restored leading Indicators | ||||||
---|---|---|---|---|---|---|
Growth progression-SAAR | ||||||
3Mos | 6Mos | 12mos | Yr-Ago | |||
OECD | 11.0% | 2.7% | -6.1% | -2.9% | ||
OECD7 | 10.4% | 1.3% | -7.6% | -3.3% | ||
OECD.E-Area | 16.0% | 6.4% | -3.2% | -3.9% | ||
OECD.Japan | -4.4% | -7.1% | -15.0% | -1.9% | ||
OECD US | 11.4% | 0.0% | -8.5% | -3.2% | ||
Six month readings at 6-Mo Intervals: | ||||||
Recent six | 6Mo Ago | 12Mo Ago | 18MO Ago | |||
OECD | 2.7% | -14.2% | -4.2% | -1.5% | ||
OECD7 | 1.3% | -15.8% | -4.2% | -2.5% | ||
OECD.Eur | 6.4% | -12.0% | -6.9% | -0.7% | ||
OECD.Japan | -7.1% | -22.3% | 2.0% | -5.6% | ||
OECD US | 0.0% | -16.3% | -4.3% | -2.2% | ||
Slowdowns indicated by BOLD RED |