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Economy in Brief

OECD Leading Indicators
by Louise Curley  November 13, 2012

The Composite Leading  Indicators of  the OECD (Organization for Economic Cooperation and Development)  were published today.  Besides the official 34 member countries from Europe, North and South America, Australia, New Zealand, and Israel data are given for the transition economies:  Brazil, India, Indonesia, Russia, China and South Africa. The indicators are designed to catch turning points in economic activity. They are based on economic series that tend to be early movers in the business cycle.  The individual series are subject to a number of tests and then are combined into a single series--the Composite Leading Indicator.  The OECD also provides a monthly series of GDP against which the economic indicator can be charted.  The attached chart shows the Leading indicator for the 34 members together with the GDP for these countries.  The leading index does indeed lead the changes of direction in the GDP reference series.   The leading indicators for July, August and September are forecasting declines for these months in the total GDP of the OECD member countries.

There is, however a great deal of diversity among the countries.   As can be seen in the table below, the leading indicators in the US, Canada and China are holding steady  while the leading indicators in Brazil, the UK and Ireland are showing signs of picking up, and those in Germany, France and Japan are worsening.

OECD Leading
Indicators
Sep Aug Jul Jun May Apr Mar Feb Jan
Steady
United States 100.90 100.80 100.77 100.79 100.86 100.91 100.91 100.84 100.68
Canada 99.70 99.67 99.69 99.69 99.74 99.77 99.77 99.75 99.72
China 99.43 99.43 99.43 99.44 99.49 99.57 99.71 99.83 99.93
Picking Up
Brazil 99.51 99.44 99.36 99.23 99.09 98.94 99.73 99.49 99.24
UK 100.24 100.06 99.89 99.75. 99.65 99.58 99.51 99.42 99.32
Ireland 101.17 101.11 101.11 100.97 100.93 100.88 100.77 100.61 100.39
Worsening
Germany 98.70 98.96 99.24 99.52 99.75 91.98 99.98 99.98 99.94
France 99.50 99.56 99.62 99.67 99.71 99.75 99.80 99.85 99.92
Japan 100.18 100.27 100.38 100.51 100.65 100.75 100.81 100.79 100.72
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